Thursday, July 23, 1998
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B U S I N E S S | Thursday, July 23, 1998 |
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States told to control foodgrain
prices NEW DELHI, July 22 — The Food Ministry has asked all state governments to check the delivery system in their public distribution system... Fresh bids for HMT NEW DELHI, July 22 — The government would within a month call fresh bids from private parties for picking up to 74 per cent stake in Hindustan Machine Tools (HMT), Sukhbir Singh Badal said... |
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Punjab industry to boycott ministers LUDHIANA, July 22 — The 33 per cent hike in the power tariff announced by the Punjab State Electricity Board has put the Punjab industry on the warpath... Mutual funds can invest abroad MUMBAI, July 22 (PTI) — Securities and Exchange Board of India (Sebi) Chairman D.R. Mehta has said mutual funds will soon be allowed... |
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Essar launches E-mail service NEW DELHI July 22 — Essar cellphone today launched its “electronic mail (E-mail) service on cellphone”, the first of its kind in Asia. Dubbed “cellmail”... Hoffland director arrested NEW DELHI, July 21 —The Delhi Police has arrested one of the active directors of Hoffland Group of Companies, which allegedly defrauded investors of over Rs 80 crore... Haryana Budget has ignored industry, says CII Siemens records loss of Rs 15.2 cr Pakistan diary  |
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States told to control foodgrain
prices |
| Fresh bids for HMT NEW DELHI, July 22 (UNI) — The government would within a month call fresh bids from private parties for picking up to 74 per cent stake in Hindustan Machine Tools (HMT), Minister of State for Industry Sukhbir Singh Badal said here. “We would be issuing advertisements calling for tenders for a joint venture for reviving the company’s Pinjore-based tractor unit. We are very open and might even reduce our holding in the company to 26 per cent but there is no question of selling off the unit,” Mr Badal told UNI in an exclusive interview. Though the cap has been fixed at 26 per cent, the precise extent of dilution would be decided after evaluating all the bids. The dilution, he said, would be only in the tractor manufacturing unit. “The tractor division will be treated as a separate entity. We are not presently looking at the watch-making and machine tool businesses at HMT.” The company had in 1997-98 posted a net loss of Rs 200 crore. It may be recalled that HMT had about two years ago, floated a tender to offer its tractor division as a separate entity to a private partner giving him a controlling stake of 51 per cent in the company while the HMT was to keep the remaining 49 per cent. After the initial bidding process, Escorts and L and T-Johm Deere had been shortlisted. Escorts gave the highest bid of Rs 131 crore while L and T-John Deere combine’s bid was for about Rs 117 crore. However, both the companies later refused to takeover the unit. |
| Punjab industry to boycott
ministers Tribune News Service LUDHIANA, July 22 — The 33 per cent hike in the power tariff announced by the Punjab State Electricity Board has put the Punjab industry on the warpath. A large number of organisations representing trade, commerce and industry have announced plans to organise dharnas, demonstrations, bandhs, gheraos and even a social boycott of the ministers, MLAs and officers in protest against the “unjustified increase.” The leaders of these organisations have announced that the agitation will continue till the government withdraws the increase and sits downs with representatives of business and industry to find an amicable solution to the problem. These leaders, including Mr Indermohan Singh Grewal, Mr Amarjit Goyal, Mr Inderjit Singh Pardhan, Mr Avtar Singh, Mr P.D. Sharma, Mr N.S. Nanda and Mr Harish Khanna, are unanimous in their opinion that the hefty hike in the power tariff for industry had been enforced to offset the loss being suffered by the PSEB on account of the free power supply to the agriculture sector. In other words, industry was being used for cross-subsidisation of the agriculture sector. They would not allow the government to make the Punjab industry the proverbial sacrificial goat for its “lop-sided and populist policies,” they say. Some of the industrial organisations have accused the government and the power board of falsifying figures in order to hide the true extent of the subsidy being given to the agriculture sector which was in excess of Rs 1,000 crore annually. They said the government was deliberately minimising the extent of subsidy to the agriculture sector to justify a hike in the industrial and domestic consumers. If the government was intent on subsidising the agriculture sector, then it should levy cess on the wheat and rice produced in Punjab and sold elsewhere in the country. Alternatively, it should strive for a higher procurement price for wheat and rice. It was pointed out that the agriculture sector consumed 43.90 per cent of the total power produced in the state but paid nothing for it. Industry consumed 11.20 per cent of the power but paid 35.10 per cent of the total revenue earned by the electricity board. They also described as misleading the comparison put forth by the government to show that the power tariff in Punjab was still much lower than that in the neighbouring states. The representatives of trade and industry said that the hike would sound the death knell for the industry. It was announced all the electric arc furnaces, induction furnaces, re-rolling steel mills would go on indefinite strike from tomorrow. Punjab has five electric arc furnaces, 250 induction furnaces and over 400 re-rolling steel mills.Besides demonstrations, dharnas and gheraos of power board officials, ministers and the Chief Minister would also be organised. A “non-cooperation movement” will be launched against the government high-ups including ministers, MPs and MLAs with immediate effect. No industrialist and tradesman will welcome and garland any official dignitary. A meeting of all trade and industrial associations will be held at the Punjab Trade Centre, Industrial Estate, Ludhiana, on July 24 under the chairmanship of Mr Inderjit Singh Pardhan, to decide the further course of action. GURDASPUR (FOC): New entrepreneurs, who had planned to set up their industries in this district, are shifting to Kathua in Jammu and Kashmir and Damtal and nearby places in Himachal Pradesh due to high power tariff in Punjab. PATIALA (FOC): The Patiala Chamber of Industries in a statement today given an ultimatum to the state government to withdraw the 33 per cent hike in the power tariff by July 28 or face protests from August 5. Mr N.S. Khurana, president of the chamber, said in addition to the increase in road transportation rates and the 20 to 30 times increase in house tax charges, the hike in the electricity charges has pushed many industries on the verge of closure. Already, the election promise of abolishing octroi has not been fulfilled. HOSHIARPUR (FOC): Members of the Hoshiarpur Large and Medium Industries Association in a representation to the Chief Minister said the power tariff increase would make the position of the already sick industries in Hoshiarpur district very miserable. The increase can lead to the closure of many industries. |
| Pakistan diary USA to abstain from IMF-Pak talks WASHINGTON, July 22 (AP) — The USA has given the green light to the IMF to resume negotiations with Pakistan to help avert the financial disaster even though the Americans have imposed economic sanctions on the country to protest its nuclear testing. Senior State Department and treasury officials said last evening that the USA would abstain or vote against any new IMF loans that emerged from these negotiations as US sanctions laws require. But officials, speaking anonymously, said they believed the loans would be approved by other industrialised democracies on the IMF Board, provided Pakistan agreed to substantial economic reforms. They said the US decision not to block any new IMF loans was made by high-level officials after consultations with interested members of the Congress, who expressed “no significant opposition”. Earlier State Department spokesman James P. Rubin said: “We have not softened or somehow waived the sanctions”. He said the intent of the sanctions laws was “never to punish Pakistan or its people or precipitate an economic collapse”. Forex plan ISLAMABAD (Reuters): Pakistan, which says it may have to call a moratorium on $ 30 billion debt
because of sanctions against its nuclear tests, has
unveiled a package to conserve hard currency and raise
export earnings.Finance Minister Sartaj Azia told a news conference yesterday that the authorities had agreed on a dual exchange rate policy to enhance export earnings and make some hard currency available at non-official rates for imports. He said the measures would make devaluation of the rupee unnecessary. It has traded between 44 and 63 rupees to the dollar since the sanctions were imposed. Under the scheme, exporters must hand over 50 per cent of their foreign earnings to the State Bank of Pakistan at the official exchange rate. The remainder could be retained by the exporter for up to two weeks and sold to commercial banks at whatever rate they offered, but Aziz said it would be lower than the free market rate. Remittances ANI adds: Banks in Pakistan have been ordered to ensure that the money sent from abroad is remitted within 72 hours instead of the lengthy process that spans more than a week. “The banks are now required to complete the process of receipt of foreign exchange sent by the overseas Pakistanis in under four days or get ready to pay stiff penalties”, a State Bank of Pakistan official said. Pakistan receives about $ 1.2 billion in remittances annually through the banking channel. Much to the anguish of the government and loss to the exchequer, expatriates have come to rely on illegal, non-banking channels like “hundi” and “hawala to send their remittances”. Currency dealers The State Bank of Pakistan (SBP) has decided to launch a crackdown on 1,100 unlicensed currency dealers in the country blamed for high kerb rates of the dollar. An SBP official confirmed here yesterday that the measure had been decided to narrow the gap between the official rate of dollar (Rs 46) and the kerb rate (up to Rs 62), caused by the illegal dealing of unregistered dealers. There are nearly 300 registered currency dealers in the country. “The unregistered dealers have been given time until August 20 to obtain licences or face legal action”, the official said. Airport charges Pakistan has decided to reduce aeronautical charges by 25 per cent at its Quaid-e-Azam international airport at Karachi. The decision was taken by the Board of Directors to stem the pullout of various international airlines. “The decision will provide great relief to the airlines, which will save $ 800 on each flight of a Jumbo aircraft”, an official of the Civil Aviation Authority said. “It is part of an overall package intended to make Pakistan’s airports attractive for airlines in line with the aviation policy of the present government”, he added. IFI’s deposits Following an appeal for financial assistance from Islamabad, the Islamic Financial Institutions (IFIs) have decided to keep their foreign currency deposits in Pakistan, Finance Minister Sartaj Aziz said in Islamabad yesterday. A meeting of the IFIs will be held in Jeddah on July 27 to discuss the issue. Different Islamic countries own the IFIs. Last week, the Islamic Development Bank had enhanced Pakistan’s credit limit from $ 150 million to $ 400 million. Aid from Kuwait Kuwait has given $ 250 million to Pakistan to support Islamabad’s slipping foreign exchange reserves, Finance Minister Sartaj Aziz told journalists yesterday. The loan to improve the balance of payment position has been lent by Kuwait for two years and Pakistan will pay 4 per cent interest rate. The loan deal was finalised during Prime Minister Nawaz Sharif’s recent visit to the oil-rich Gulf state. Defaulters The much-awaited stern action against major bank loan defaulters in Pakistan has been slowed down to allow them time to pay up. “The government is more interested in watching the response from the defaulters before the crackdown is launched for recovery of the unpaid loans”, Finance Minister Sartaz Aziz was quoted as saying by the local Press. According to Aziz, action against the defaulters has been delayed because the lists are under preparation by the public sector banks and development finance institutions. |
| Essar launches E-mail service NEW DELHI July 22 (PTI) — Essar cellphone today launched its “electronic mail (E-mail) service on cellphone”, the first of its kind in Asia. Dubbed “cellmail”, the service allows Essar subscribers to receive E-mail directly on their mobile phones from anyone anywhere in the world. “Every Essar cellphone customer can have an E-mail address without having a computer or internet connection,” Chief Executive Officer of Essar Cellphone, Dr Erich Buerkler, said in a statement. The fee for this service is Rs 75 per month for receiving unlimited messages. “Customers will also be able to reply to their E-mails through their handsets shortly (reverse mail),” he added. Essar cellphone, a joint venture between Sisscom and the Essar Group, provides its cellular services in Delhi, Rajasthan, Haryana, Punjab and Uttar Pradesh (East). It has a subscriber base of 120,000. |
| Mutual funds can invest abroad MUMBAI, July 22 (PTI) — Securities and Exchange Board of India (Sebi) Chairman D.R. Mehta has said mutual funds will soon be allowed to invest abroad, including in Indian GDRs. Delivering the valedictory address at a two-day seminar on mutual funds here yesterday, Mehta said the Pratip Kar committee, which has submitted its report, recommended modalities for overseas investments by mutual funds. The report has suggested that apart from existing and new schemes, exclusive schemes be floated for investing in foreign markets. Sebi has written to the central government and the Reserve Bank of India (RBI) to permit investments by mutual funds in GDRs. Mutual funds have been demanding permission to invest in GDRs so as to have a level playing field with foreign institutional investors as regards arbitrage opportunities. Mutual funds will also be allowed to appoint sub-custodians to manage their foreign portfolios. The other two changes in the offing are related to strengthening the role of trustees and submission of quarterly compliance reports. Referring to criticism of assured return schemes, the Sebi Chairman said it was a manifestation of inability of sponsors of the private sector mutual funds to guarantee fixed returns. Investments overseas will be subject to a limit of $ 50 million per mutual fund and an overall limit of $ 500 million. Private sector mutual funds have campaigned against assured return schemes only “to stop competitors from having such schemes (assured returns)”, he said. He asked “Why should we prohibit them in a country where we do not have proper pension schemes/social security system?” With non-banking finance companies and collective investment schemes now being regulated, mutual funds have a better opportunity. In the context of multiplicity of regulators, Mehta said at least 15 agencies were involved in governing the financial markets. “The major problem in India is absence of the concept of a dominant/lead regulator and (in the process) Sebi gets blamed for everything,” he said pointing out that the U.S. Securities Exchange Commission will not get involved in a lot of things that Sebi does. |
| Hoffland director arrested NEW DELHI, July 21 (PTI) —The Delhi Police has arrested one of the active directors of Hoffland Group of Companies, which allegedly defrauded investors of over Rs 80 crore. The accused, Vinod Pant, a Chartered Accountant was arrested by Crime Branch sleuths from his residence at Jawaharlal Nehru University campus in South Delhi yesterday, Deputy Commissioner of Police (Crime) Karnal Singh said today. With this, the number of arrests made in connection with the Hoffland fraud case has gone upto four. Earlier three directors of the group — Deen Bandhu Sharma, Kishan Chand Aggarwal and Mohan Lal Sharma — were arrested, he said. Pant, Chief Manager in Hoffland Finance Company and a Director in other sister concerns, “was allegedly involved in diversification and misappropriation of funds collected from the investors,” Singh said. “On sustained interrogation the accused disclosed assests located in Delhi, Mumbai and Calcutta acquired by the company from funds collected from investors,” the DCP said adding a search is on for main accused Brij Bhushan Sharma. |
| Haryana Budget has ignored
industry: CII Tribune News Service CHANDIGARH, July 22 — The CII has complemented Haryana Finance Minister Charan Dass Shorewala for presenting a Budget with an all-time high annual plan of Rs 2,260 crore. CII Haryana State Council Chairman Ramesh C. Jain welcomed the government’s focus on the power, transport and roads. He said the proposed outlay of Rs 505 crore (about 22.3 per cent of the total plan) for generation, transmission and distribution of power was a step in the right direction for overcoming the severe power crisis in by the state. However, the Budget has offered nothing to the industry, which was passing through a severe recession. In that sense it was a lacklustre Budget, Mr Jain added. |
| Siemens records loss of Rs 15.2 cr MUMBAI, July 22 (PTI) — Siemens India Ltd has recorded a net loss of Rs 15.2 crore on a turnover of Rs 175.28 crore in the first quarter of this fiscal. The net loss in the previous year was of Rs 155.63 crore. The company reported an operating profit before interest and depreciation of Rs 5.83 crore, while interest and depreciation costs for the three month period amounted to Rs 15.97 crore and Rs 12.6 crore, respectively. Siemens has also reported an extraordinary income of Rs 7.47 crore relating to the restructuring of the business operations and assets of the company. Net income from sales and services for nine months ending June 30 amounted to Rs 687.43 crore as against Rs 779.8 crore earned in the corresponding period of the previous year, a company release said here today. |
| Biz
briefs Tourism NEW DELHI, July 22 (PTI) — The foreign exchange earnings from tourism during 1997-98 were estimated at Rs 11,263.68 crore, the Rajya Sabha was informed today. The tax revenue earned by the central government from expenditure tax during the year was Rs 277.91 crore, Minister of State for Tourism Omak Apang said in a written reply to the House. About 2.37 million foreign tourists visited India in 1997, the minister said. RRB staff NEW DELHI, July 22 (PTI) — Regional rural banks’ (RRBs) officers and employees will hold a rally on July 24 to protest the delay in setting up the National Rural Bank of India (NRBI) and non-implementation of wage revisions, the chief co-ordinator of the officers and workers organisation said here today. The All-India Gramin Bank Workers Organisation and the All-India Gramin Bank Officers Organisation will demonstrate in front of Parliament to demand merger of the 196 RRBs to form the NRBI which had been agreed to by the Finance Ministry, chief co-ordinator S.K. Rathore said. Milton MUMBAI, July 22 (PTI) — Milton Plastics, a leading thermoware manufacturer, has chalked out plans to export “Milton puriguard” — a new range of water bottles and water jugs with inbuilt water purifier to the Gulf, African and European countries. As part of its strategy to provide contemporary and innovative products, the company has diversified into the Rs 750 crore water purifiers and water filters segment. Solar project CALCUTTA, July 22 (PTI) — The proposal for setting up the world’s first integrated solar combined cycle power project near Jodhpur in Rajasthan has been approved by the Commission for Additional Sources of Energy (CASE). When implemented, the project would generate 140 MW by using both solar and wind energy, the annual report of the Ministry of Non-Conventional Energy Sources said. Salt NEW DELHI, July 22 (PTI) — A recent government order making use of iodised salt compulsory and banning common salt came in for a sharp criticism in the Lok Sabha with members cutting across party lines vociferously demanding that the notification be scrapped. The matter, raised by Janata Dal member Ram Vilas Paswan, drew support from members from all sections.  |
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