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| Saturday, March 31, 2001, Chandigarh, India   
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Investors lose 2 lakh crore in stocks
CSE awaiting instructions
FDI inflow grows by 15 pc Turbine fuel prices decontrolled Elli Ranbaxy among FIPB proposals |
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‘Production of rice, wheat may fall’ SEBI to dispose of
complaints in 90 days ADB eyes insurance TCS to chip in
$
1.3 m for research Govt extends one-time
settlement scheme HFC steps to recover loans |
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Investors lose 2 lakh crore in stocks New Delhi, March 30 The recent crisis in the capital market could even be bigger than the 1992 securities scam of Harshad Mehta days. While FIIs, mutual funds, Indian financial institutions and big brokers battle it out in the bourses, it is the small investor who has been crushed by the games of the bulls and the bears. SEBI and the Income Tax authorities are probing the deal at various levels, but if the apex body of chartered accountants in India is to be believed the manipulations and price rigging in the market had begun nearly 18 to 24 months ago. According to the journal of the All- India Chartered Accountants’ Society, market operators in league with the FIIs boosted share prices by as much as 1500 to 2500 per cent over a short span and later booked profits and gains at the cost of common investors. During the entire price rigging operations, SEBI watched these events as “normal” and the common man’s voice was drowned in the hectic lobbying by the FIIs and big operators. Surprisingly, these very FIIs and operators often find a place in the “risk management groups” of SEBI. The recent flurry of activities in the SEBI and the stock exchanges notwithstanding, when the speculative trades actually took place there was no one to check this. Even when large positions were being built in a few specific scrips, the signals of the impending disaster was
ignored. The hesitant measures, like levying margins, taken by SEBI spared the “holy cows”—FIIs and qualified institutional buyers and went after a small group of operators. The woes of the market were compounded when the bull operators joined hands with some bear operators. They played havoc on select scrips, created large positions, got price sensitive information about the bull operators and took the whole market to ransom. A number of cooperative and scheduled banks are understood to have taken large capital market positions, beyond their permissive limits, and this could wipe out a major portion of their capital and reserves. The apex body of CAs has cautioned that with banks being allowed to float depository as well as stock broking arms, a new “bank security scam” could be in the offing. Suggesting an online surveillance and regular corrective action to check the manipulators, it feels that the CBI or intelligence agencies could be involved in the process in the interest of the common
man.
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CSE awaiting instructions
Kolkata, March 30 “We are awaiting instructions from SEBI for the future course of action,” a senior CSE official said. The official said the stock market regulator’s suggestions would be required for future formation of the CSE governing committee. The Executive Director of CSE, Tapas Dutta, however, said the resignations were not at the behest of SEBI, but only to demutualise the stock market as mooted by the regulator. With the resignation of the eight elected directors, including other committee members Raju Bachhawat, Bipin Dewra, J.M. Chaudhary, Rajendra Agarwala, Ajit Khandelwai, and Girish Mehta, the CSE governing panel now consists of six public nominees and three SEBI representatives. When contacted to react on the development, the chairman of SEBI D.R. Mehta, was not available.
PTI
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FDI inflow grows by 15 pc
New Delhi, March 30 According to the annual report of the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, a slew of steps have also been taken to simplify foreign investment procedures in several key areas including global mobile personal communications systems (GMPCS), roads, ports, power sector and highways. While foreign investment has been allowed in news activities like GMPCS, FDI limit has been raised to 100 per cent in power, roads and highways, ports and harbours, vehicular tunnels and vehicular bridges, under the automatic route. Essentially, low gestation projects like electrical and electronic equipment, computer software, services and processed foods have registered speedy inflows while in the case of long gestation projects inflows have been slower. As per the report, cumulative approval of FDI into India since 1991 adds up to Rs 2,46,797.53 crore ($ 68.31 billion) and the total inflows up to December 2000 are nearly Rs 89,286.56 crore (about $ 23.7 billion) — giving a success rate of around 36.18 per cent. This, when adjusted for contingency and mutually exclusive approvals in the power, telecom and LNG sectors indicates an inflow rate of nearly 57 per cent. Regarding Industrial Policy reforms, the report said as part of procedural simplification, the list of items requiring compulsory industrial licensing is being constantly reviewed. At present only six industries are under compulsory licensing mainly on account of environmental, safety and strategic considerations; four industries are reserved for the public sector. For industries not falling under licensing, investors are required to submit only an Industrial Entrepreneur Memorandum (IEM) to the Secretariat of Industrial Assistance (SIA), no industrial approval needed for such exempted industries.
PTI
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Turbine fuel prices decontrolled New Delhi, March 30 The decontrol is a part of the phase programme of dismantling of administered price mechanism of petroleum products announced in November 1997. One of the pre-requisites for de-controlling the pricing of ATF was enactment of a legislation exempting ATF sales to foreign airlines from the levy of state sales taxes, as envisaged under the bilateral air services agreements with the other countries. For this purpose, a Bill was introduced in the Winter session of Parliament, which could not be passed so far. In spite of this difficulty, the government has decided to keep its commitment on reforms in the hydrocarbon sector as per the schedules notified, Mr Ram Naik said. The amounts of sales taxes paid to the state governments on sales of ATF to foreign airlines would, pending enactment of the legislation, be reimbursed to the oil marketing companies from the oil pool account. |
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Elli Ranbaxy among FIPB proposals New Delhi, March 30 Among the other proposals which came up for consideration include British company Abbott Equity Holdings Ltd’s, which is engaged in pharmaceutical formulations and insulin and has already set up manufacturing facilities in the country. Abbott’s application follows its open offer earlier this month for acquiring 20 per cent additional stake in India pharma company Knoll Pharma at Rs 328 per share. Abbot UK already owns 51 per cent stake in Knoll Pharmaceuticals Ltd indirectly but does not hold any shares of the target company directly, as per a notice the company submitted with the BSE on March 7. The announcement offer is subject to the acquirers’ (Abbot UK and Abbot USA) obtaining the necessary statutory approvals in this regard, it said adding the offer
opened on May 2 this year and close on May 31. Among the other major proposals which came up for the board’s consideration include Swedish company Astra Pharmaceuticals AB, which is in the race for acquiring Indian company ICI Ltd’s pharmaceutical business. US-based General Electric International Operation Co Inc’s proposal involves foray into high-growth sectors including IT services, infrastructure, IT enabled services, telecommunications and the Internet. German company Enron Wind GmBH’s proposal involves assembly, installation, operation and
maintenance of wind turbines and development of wind farms; Chennai-based Select Multirock Pte Ltd proposes expansion into export of granite, rough granite blocks and polished granite slabs.
PTI
‘Production of rice, wheat may fall’ New Delhi, March 30 The highest growth rate of 9.6 per cent was achieved by construction, while the sectors of financing, insurance, real estate and bus services had a 9.3 per cent growth. Agriculture, forestry and fishing witnessed the lowest growth at 1.2 per cent, the figures based on factor cost at 1993-94 prices show. However, this signified a marked improvement for the sectors as compared to the minus growth rate of 1.1 per cent recorded in the corresponding quarter of the previous year. Mining and quarrying had a growth rate of 4.3 per cent, manufacturing 6.1 per cent, electricity, gas and water supply 7.7 per cent, trade, hotels, transport and communication 7.4 per cent and community, social and personal services 8.2 per cent. The GDP for the quarter was estimated at Rs 3,28,330 crore, as against Rs 3,10,613 crore in Q3 of 1999-2000. The production of rice during the Rabi season of 2000-01 is expected to decline by 0.7 per cent, over the corresponding season in the previous year. The production of wheat during 2000-01 is also expected to decline by 7.4 per cent over its estimated production during the previous year. The production of coarse cereals and pulses is anticipated to decline by 6 per cent and 19 per cent, respectively during the Rabi season of 2000-01. Among the commercial crops, the production of oilseeds is expected to decline by 21.5 per cent during this Rabi season over the production in the corresponding period last year. The crops, sugarcane and cotton are, however, expected to show positive growth rates of 0.5 per cent and 13.1 per cent, respectively, during this year over the estimates of the previous year. According to the latest estimates available on the index of industrial production (IIP), the index of mining, manufacturing and electricity, registered growth rates of 5.3 per cent, 5.5 per cent and 7.6 per cent, respectively, during Q3 of 2000-01, as compared to the growth rates of (-) 0.1 per cent, 7.4 per cent and 7.7 per cent in these sectors during q3 of 1999-2000.
UNI
SEBI to dispose of
complaints in 90 days New Delhi, March 30 Investors’ are also being advised to approach the RBI for complaints concerning non-banking finance companies, Cabinet Secretary T.R. Prasad told the Standing Committee of Secretaries for Public Grievance Redressal which reviewed the progress and performance of the Department of Company Affairs in dealing with the disposal of grievances. As much as 45 per cent of the departments’s complaints pertain to non-banking finance companies for which RBI is the nodal agency. Most of the complaints which concern the company affairs department related to non-payment of fixed deposits by the companies and transfer of shares and debentures. About 90 per cent of the complaints have been redressed against defaulting companies, an official press note said today.
UNI
ADB eyes insurance New Delhi, March 30 “We would like to enter the Indian insurance sector,” ADB resident representative in India Frank Polman told PTI here today, but expressed apprehension about the time within which it would be possible. He said “the bank would like to extend financial support and technical assistance to the Indian partner to tap long-term funds. “The bank was not approached by any Indian company for an insurance joint venture as yet, he added. ADB has communicated their interest to Insurance Regulatory and Development Authority (IRDA) recently and sought clarification on whether the bank could hold stake in addition to the 26 per cent allowed for foreign companies. However, IRDA has informed the bank that it’s investment would be counted as part of the maximum stipulated 26 per cent foreign stake in a venture. The only way the bank could enter the Indian insurance sector is by joining hands with another foreign insurer to pick up 26 per cent stake or wait for liberalisation of foreign investment norms in the sector after seven years. “We might have to wait for some years before the investment norms for the insurance sector are liberalised,” Polman said. ADB had also evinced interest in the country’s debt market at one point of time. The Manila-based bank, which has a 10 per cent in SBI Gilts — a primary dealers in government securities, was believed to have shown interest in picking up stake in the proposed clearing house for G-Secs but backed out from the project promoted by State Bank of India, IDBI and HDFC. The bank has extended a total $ 1.3 billion for various projects of PowerGrid Corporation, Gujarat power sector, Calcutta’s environment projects and Madhya Pradesh fiscal reforms last year. This year also the bank’s exposure in India is expected to be about $ one billion including a $ 500 million emergency loan to the earthquake affected areas of Gujarat.
PTI
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TCS to chip in
$ 1.3 m for research Washington, March 30 The research on “infrastructure support to network-based content delivery” will be jointly conducted by professionals from TCS and the university. “Together with the university, we have committed impressive resources that will continue not only the state’s record, but also TCS’ record of worldwide technology leadership,” Ramadorai said addressing technology leaders in California’s Riverside. Satish
K. Tripathi, Dean of the University’s Bourns College of Engineering, said the state was the nerve centre of technological innovation in the world of internet. TCS, Silicon Valley’s first India-based company and the largest it consultancy in Asia, was recently named the fourth fastest-growing consultancy in the USA. TCS provides information technology and management consulting services to organisations in over 50 countries. The $ 500 million company, with 15,000 employees, has 38 offices in the USA and over 100 worldwide.
PTI
Govt extends one-time settlement scheme Mumbai, March 30 Talking to reporters after the naming ceremony of Indian Merchants’ Chamber (IMC)’s VIP room as “Shri Pranlal Devkaran Nanjee Indian Merchants’ Chamber VIP Lounge” here today, Mr Patil said, “the new guidelines in this regard have been finalised and would be made public within next couple of days.” With extending the one-time settlement scheme to the co-operative banks, the debtors and the banks can apply compromise formula to settle the long-pending loan upto Rs 5 crore. There was a demand from the industry as well as banking sector to remove the descrimination between the public sector banks and co-operative banks as far as the NPA is concerned.
UNI
HFC steps to recover loans Chandigarh, March 30 Chairman of the corporation, S.C. Choudhary, said here today the HFC had decided to extend the clearance of default under one go scheme beyond March 31, 2001. Under the scheme, penal interest was waived off if borrowers opted to clear 50 per cent of the overdue amount and to pay the balance in equal monthly instalments till March, 2002, along with instalments falling due in between. Now the working capital loan cases would also be covered under the scheme. The HFC had exceeded sanction targets for the current financial year and the overall sanctions had crossed Rs 125 crore.
ATM at PGI Chandigarh, March 30 Mr D.L. Manwani, General Manager of the bank disclosed that this installation shall go a long way in fulfilling the demand for 24 hours a day banking to PGI staff who work round the clock. Mr K.K. Mehra, DGM, zonal office Punjab, Mr C.L. Sethi, AGM and Mr J.M. Chadha, Chief Manager were also present. |
cr
Delphi to cut 11,500 jobs Lawyer to drop IBM Holocaust suit United Airlines to resume flight Curbs on Asian food imports Colour screen mobile launched |
bb
Price index Canbank MF Can Fin Homes Panipat Ref ED Electrolux Allwyn Lancer prices Broker missing Hudco cuts rate Petro-chem meet Spice Telecom |
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