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Tuesday,
February 4, 2003, Chandigarh, India  
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When
Rolls-Royce ‘bribed’ for power contract HFCL-T to
be merged with HFCL Reliance
telecom network in USA Moody’s
upgrades India’s debt rating |
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500 run
for Terry Fox cancer relief Nabard
may give 12,485 cr loans Hind
Lever new business venture
Buyer-Seller
Meet
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When Rolls-Royce ‘bribed’ for power contract London, February 3 In an extraordinary saga involving one of the world's best-known names, the UK company is at the centre of claims of multi-million-pound payments to a secret company in the British Virgin Islands, a vermicelli merchant and a plan to build a gas-fired power station in southern India. The allegations, due to be heard in the high court in London later this year, will also raise questions over the role by a secretive British government department that now risks landing the British taxpayer with a £ 50m bill. The story begins in November 1993, when Queen Elizabeth II's royal yacht Britannia sailed to India, mooring in the navy docks at Mumbai, to celebrate British Week. On board the ship was then Tory (Conservative) Foreign Secretary Douglas Hurd, a smattering of other ministers and several dozen senior figures in British industry. The Indian government had just begun privatising vast tracts of its economy and for the ministers the purpose of the trip was to ensure UK companies gained a toe-hold in the newly liberalised markets. Rolls-Royce, which had just donated £ 35,000 to the Tories, announced it had signed a £110m contract to build and operate a state-of-the-art power station at Kakinada in Andhra Pradesh. While the company had sold off its famous luxury car division in the early seventies, it was fighting to remain a leading global force in the aerospace and power industry. The Indian deal, known as the Godivari project, was a major coup for its board and the increasingly unpopular Tory government. Yet nine years later, evidence has emerged that Rolls-Royce's endeavours to tie up a historic deal to supply an impoverished Indian state with electricity was far from straightforward. The Observer has obtained details of a secret “agency” agreement that Rolls-Royce — and its subsidiary Parsons Power Generation — entered into with a company called Towanda Services, based in the British Virgin Islands. Just two weeks before Rolls-Royce trumpeted its Indian power deal, the company agreed to pay £ 15m “commission” to Towanda if it won the power station contract. The funds were to be paid in instalments of £ 3m. For a number of years, the existence of Towanda and the identity of its owner remained secret. But following a legal dispute in India between shareholders of the Indian company that owns Kakinada, explosive evidence emerged implicating Rolls-Royce in a multi-millionpound kickback scandal. Indian court documents revealed that Rolls-Royce had agreed to pay £ 15m to a unit controlled by Kishan Rao, who had made his fortune selling vermicelli. Most significantly, Rao was also the Managing Director of power station company Spectrum Power that was responsible for awarding the Kakinada contract to Rolls-Royce. To a group of more than 100 US investors who poured $9m into this project this is clear evidence of an alleged bribe and they are suing Rolls-Royce in the high court. The investors, who fear they have lost their money in the power project, want Rolls-Royce to pay the alleged bribe back to the company. Most of the US investors were wealthy Indian-born professionals whose families originated in Andhra Pradesh. They had hoped that, by pumping money into the project, the local community would finally get a reliable source of cheap electricity. While the power station finally started producing electricity in 1998, it ended up costing almost £ 30m more than originally estimated. The result has been that the Kakinada residents have been paying much more for their electricity than they expected. By arrangement with The Observer, London.
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HFCL-T to be merged with HFCL Solan, February 3 HFCL had earlier moved an application under Sections 391 to 394 of the Companies Act, 1956, proposing amalgamation of HFCL Trade Invest Ltd with it. Today’s meeting was conducted under the supervision of Mr Parneet Gupta, the court appointed chairperson. The appointed date of the scheme of merger had been fixed for March 31, 2003. The authorised capital of HFCL-T is Rs 100 crore. The issued, subscribed and paid up share capital of this company, as on March 31, 2002 was Rs 40 crore comprising four crore fully paid equity shares of Rs 10 each, held entirely by HFCL and its nominees. HFCL MD, Dr R.M. Kastia, while briefing the shareholders about the scheme of merger of the two companies said that the proposed amalgamation was aimed at improving the core competency of the HFCL Group. The merger scheme also proposed utilisation of an amount not exceeding Rs 1100 crore out of the Securities Premium Account for adjusting writing off the miscellaneous expenditure. This expenditure had been incurred by the HFCL on R&D, on reorganisation of its business processes and development of global competitiveness. On the scheme becoming effective 4,00,00,000 equity shares of Rs 10 each and 16,08,66,140 optionally Convertible Debentures held by HFCL in HFCL-T would stand cancelled. “The merger scheme was merely a matter of internal reorganisation between HFCL and HFCL-T and did not involve any refund of the paid up capital.
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Reliance telecom network in USA
New Delhi, February 3 “Reliance Communications Inc (RCI) has obtained authorisation from the USA to operate as a facility-based carrier for providing telecommunications services between the USA and foreign countries, including India,” Manoj Modi, Executive Director of Reliance Infocomm, told PTI. RCI has already established two Points of Presence (PoPs) in New York and Los Angles, he said, adding that in the UK too the company would set up these points shortly. These two countries account for a major portion of the traffic from India, Reliance officials said, adding that “from there we can distribute traffic to other neighbouring countries like from the UK to other European nations.” Asked what kind of benefit ISD callers would get from this, officials said this would bring down ISD cost substantially. By setting up these facilities in foreign countries, the company was making interconnection very simple for the carrier partners like Indian ISD operators and others from different countries, they added. Though subscribers of Reliance in India would get the major benefit on ISD calls, subscribers of other networks can also derive benefit as the call termination charges would be quite low, company official said. They indicated that call termination charges in the USA may be as low as two cents in view of CDMA based telecom network there. In Europe and the UK the termination call charges would be higher due to the presence of GSM cellular network there but for termination of calls on the fixed line network would be similar in the range of two to three cents per minutes.
PTI
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Moody’s upgrades India’s debt rating
Mumbai, February 3 The agency raised India’s country ceiling for foreign currency debt to “Ba1” with a “stable” outlook from “Ba2”, it said in a statement. “Official foreign reserves have expanded especially rapidly during the past year as increased merchandise exports, dynamic sales of information technology services and large workers’ remittances helped move the current account into surplus while capital inflows also mounted,” the agency said. The agency said the factors bolstering India’s external liquidity, including direct and portfolio investment, are likely to be sustained in the next two to three years. India’s foreign currency issuer rating was also upgraded to “Ba2” from “Ba3”. The agency, however, expressed concern over the poor state of public finances warranting a negative outlook on the government’s “Ba2” regarding the domestic currency debt rating.
PTI
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500 run for Terry Fox cancer relief
New Delhi, February 3 Terry Fox Run is an event to remember the sacrifice made by Mr Terry Fox, a Canadian cancer patient whose both legs were amputated to stop the further spread of the disease. To set a personal example of human endeavour, grit and determination and also for the concern of society he walked on his artificial legs across entire Canada covering a distance of more than 2000 km. Canadians and people from other nationalities commended his achievements and gave donations for the research and treatment of the deadly disease amounting to millions of dollars. This annual event is the saga of a sole human being reminding us to donate liberally towards harnessing diseases like cancer and diabetes. The Canadian High Commission gives away the total donations collected from the event to the All-India Institute of Medical Sciences to support their fund requirements for cancer research in India. WWICS team of 50 participants was headed by Col B.S. Sandhu, CMD. "We take part every year in this event and donate liberally for the noble cause set out by Mr Terry Fox. This year also we have donated Rs 75,000 to Terry Fox Foundation Fund by our group of companies — Forest Hill Golf and Country Club, Canadian Institute of International Studies and WWICS," said Col Sandhu.
Agencies
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Nabard may give 12,485 cr loans
Chandigarh, February 3 A state focus paper on institutional credit prepared by Nabard for 2003-04 was also presented and discussed in the seminar. According to Nabard estimates, the total ground level credit requirements for the priority sector is expected to increase from Rs 10,040 crore during 2002-03 to Rs 12,485 crore (2003-04). The crop loans are estimated to increase from Rs 5,245 crore (2002-03) to Rs 6,419 crore (2003-04). The agriculture term loans are expected to increase from Rs 1,347 crore (2002-03) to Rs 1,477 crore (2003-04). Mr A. Ramanathan, CGM, Nabard, highlighted the initiatives in the grassroot level credit planning.
TNS
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Hind Lever new business venture
Kolkata, February 3 Announcing the all-India launch of the new venture in association with “Aviance”, HLL Executive Director Dalip told newspersons here today that under Network Marketing HLL had introduced a wide range of “high quality, and
competitively priced” products.
UNI
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PUNJAB INDUSTRIAL POLICY-II Chandigarh, February 3 Yet, little effort has been made to effect recoveries from the influential defaulters of either the Punjab State Industrial Development Corporation (PSIDC) or Punjab Financial Corporation (PFC). It is common knowledge that the bureaucrats/politicians enjoy the hospitality of the defaulters, irrespective of the political party in power. Thus only a select band of defaulters stand to benefit under 'one-time settlement' or other beneficial schemes in the regime of every
political party. Several Punjab MPs at a meeting of the State Planning Board last month had demanded a ''white paper'' on public sector undertakings, boards/corporations to fix accountability on erring
politicians/bureaucrats because of whom these organisations have accumulated
huge losses and got away. In respect of the present industrial policy, bureaucratic wrangling between the departments of finance and industries/commerce has precipitated the matters much to the chagrin of
beneficiaries, particularly, the small scale sector. Taking exception to the
''objections'' raised by Mr Lakhanpal in his January 15 note, Mr Mukul Joshi shot off a rejoinder, the very next day, drilling holes in the note of Mr Lakhanpal. Besides giving para-wise reply, Mr Joshi also appended the record of proceedings of a meeting that the Chief Minister, Capt. Amarinder Singh had taken at his residence at Patiala on December 7, 2002, on the draft industrial policy. After that meeting, the draft industrial policy was ''recast''. Thus, the proposals placed before the Council of Ministers on December 30, were in accordance with the decisions taken on December 7. And Mr Joshi did not understand why ''additional advice'' was given, as per January 15 note. Will the matter be now resolved and industrial policy approved? Meanwhile, the profiligacy of the PSIDC/PFC etc. as a consequence of its ''obliging'' schemes, is indicated in the memorandum on the alleged ''demeanour'' of Mr Mukul Joshi, submitted by the 'Punjab state co-operative, boards, corporations workers'/employees' maha sangh' to the Governor and Chief Minister, on January 24. It has demanded that Mr Joshi should be transferred out from the two departments. The memorandum lists the influential defaulters owing allegiance to the ruling Congress and also names bureaucrats who have rented out their premises in Chandigarh/New Delhi to these defaulters, who owed crores to PSIDC/PFC. The memorandum is based on information culled out from its own sources and also the report of the Disinvestment Commission and reveals how PSIDC spent Rs 1 crore on winding up and special audit of Punwire and PNF in 2000-01 and an equal sum, Rs 1 crore, on electrical fittings, furniture and fixtures and at least four promoter groups have blocked over Rs 120 crore for several years that are payable to PSIDC in return of buy-back of equity. Maha Sangh has demanded that the ''courtesies'' extended to selected few government departments and private companies in the Udyog Bhavan must also be withdrawn and enquiry held to hold officials concerned accountable for foregoing financial returns. Instances of the nexus between officials and defaulter industrialists who enjoy best of relations and secured reprieve in the recent past either through OTS or converting their loans into equity are also mentioned. There is mention of at least eight instances, where alleged involvement of Mr Joshi is mentioned as to how he was ''misutilising'' his official position and machinery (cars of PSIDC) etc. Maha Sangh, says Mr Ghuman, is waiting the government response to enquire into three specific issues: settlement of financial cases, misutilisation of official/PSIDC vehicles, and Mr Joshi's objectionable misadventures, involving moral turpitude, in the car accident in August 2002 and in January 2003. In August 2002 he had met with an accident in UP, while travelling in a private car in the company of PSIDC defaulters, Rana Gurjit Singh, MLA, who owes Rs 30 crore and Capt. J S Randhawa (retd.) who has to pay Rs 3.5 crore. The Maha Sangh is scheduled to meet on February 5 to chalk-out the next course of action, says, Mr Ghuman. The first part appeared on
Sunday |
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Buyer-Seller Meet
Chandigarh, February 3 As many as 42 delegates from Canada, China, Italy, Greece, Spain, Ireland, Kuwait, the UK, the USA, etc and 70 Indian companies participated on the first day. The discussions ranged from aspects like agent appointments and technology transfer to spares and accessories, marketing networks as well as joint ventures.
TNS
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