B U S I N E S S

DoT may favour TRAI spectrum fee cut
New Delhi, May 16
The Department of Telecom (DoT) may favour TRAI’s proposal of reduction in spectrum charges from 6 per cent to 4 per cent of the adjusted gross revenue, as it involves no financial hit on the government.

Swift may come cheaper than Getz
New Delhi, May 16
Shifting gears from mass to class, car market leader Maruti Udyog Ltd is likely to position its stylish premium hatchback, Swift, to be launched on May 27, at Rs 4 lakh to take on Hyundai’s Getz, which sports a price tag of Rs 4.5 lakh.

Mr Osamu Suzuki, Chairman and CEO of Suzuki Motor Corp. (right) and Mohd Salleh Sulong, Chairman of DRB-HICOM Berhad show thumbs-up after launching the new Suzuki Swift 1.5- litre car model in Kuala Lumpur, on Monday. It is targeted at suburban young families. — AP/PTI

Subsidy for creating jobs likely
New Delhi, May 16
The government may provide subsidy to employers in small and medium units to encourage these to train unskilled workers and retain them for at least for 200 days in a year.

BJP seeks inquiry into banks’ public issue scam
New Delhi, May 16
The BJP today demanded a thorough probe into what they called a “bank public issue scam”, involving three nationalised banks — Punjab National Bank (PNB), the Allahabad Bank and Oriental Bank of Commerce (OBC) — and charged the government of “rigging prices” and “helping manipulators”.

RBI norms on credit cards unfair: CERC
New Delhi, May 16
Terming the RBI’s proposed norms on credit cards as “unfair and unilateral”, Ahmedabad-based consumer forum CERC today proposed legislations to safeguard the interest of cardholders and rein in the powers of issuer banks or companies to recover dues.

SBI, HDFC sell part of stake in CIBIL
Mumbai, May 16 
The State Bank of India (SBI) and Housing Development Finance Corporation Ltd (HDFC) have divested 23.75 per cent stake each in Credit Information Bureau India (CIBIL) to nine new investors, including ICICI Bank, Punjab National Bank (PNB), HSBC, Citibank and Sundaram Finance Ltd.

IFC commits $ 4 m equity
New Delhi, May 16
The International Finance Corporation (IFC), the private sector arm of the World Bank group, has made an equity commitment of up to four million dollars to the APIDC Biotechnology Fund, a private equity fund formed to invest in start-up and early stage life sciences businesses in India.

Corporate results

Nagarjuna recommends 60 per cent dividend
New Delhi, May 16 Nagarjuna Construction Company Ltd today declared a dividend of 60 per cent for the financial year 2004-05.

• DHFL’s net profit

• Balrampur Chini

DoT may favour TRAI spectrum fee cut

New Delhi, May 16
The Department of Telecom (DoT) may favour TRAI’s proposal of reduction in spectrum charges from 6 per cent to 4 per cent of the adjusted gross revenue, as it involves no financial hit on the government.

Even as no final decision has been taken on the overall spectrum proposals of TRAI, sources said the finance division of DoT has given a go-ahead of the reduction since it involves no outgo for the government. DoT’s audit division is currently looking into the proposal. Operators pay between 2 and 6 per cent of their AGR as spectrum charges.

Depending upon the spectrum allocation (which determines the percentage of charges), no operator is currently paying more than four per cent. GSM operators have been given 6.2 MHz spectrum and are paying at the rate of four per cent while CDMA operators are paying at the rate of two per cent with 2 MHz of spectrum.

Last fiscal, GSM operators paid over Rs 500 crore and CDMA players paid about Rs 100 crore for spectrum and microwave link and backbone charges.

Even as DoT is in the process of examining the recommendations, officials said the ministry would put the draft policy for consultation among stakeholders. The policy forms the broad framework under which spectrum is allocated.

“Our objective is growth. We do not want the growth of the sector to be stunted and at the same time no legitimate source of revenue to dry up. In this case, there is no loss to us and it would have positive impact on the industry as well,” the sources said.

Officials said TRAI’s other proposals are a lace-up of what is already given in National Frequency Allocation Plan (NFAP) 2002, including giving IMT-2000 spectrum for 3G services.

On TRAI proposals of reviewing the spectrum allocation criteria for GSM and CDMA operators with subscriber-linked approach, DoT may go for data traffic-based approach while allocating additional spectrum for the mobile companies. — PTI

Swift may come cheaper than Getz

New Delhi, May 16
Shifting gears from mass to class, car market leader Maruti Udyog Ltd is likely to position its stylish premium hatchback, Swift, to be launched on May 27, at Rs 4 lakh to take on Hyundai’s Getz, which sports a price tag of Rs 4.5 lakh. Though the final price is still not worked out, MUL is studying the option of pricing the base model of Swift lower than Rs 4 lakh, sources said.

In the national capital region (NCR), on cars up to Rs 4 lakh, the road tax is 2 per cent, while for those priced at Rs 4 lakh upwards, it is 4 per cent.

The sources pointed out that MUL can avoid the higher road tax of 4 per cent levied on cars above Rs 4 lakh in the NCR, which is one of the most attractive markets for car companies as it accounts for about 20 per cent of all passenger car sales, with Delhi contributing 15 per cent.

If Maruti positions the Swift with a price tag of Rs 4 lakh or below, Hyundai may have to reconsider the price of Getz, which was launched last year and is currently dominating the premium hatchback segment in India.

Hyundai has been manufacturing about 1,500 units of the Getz monthly. If it decides to make India an export hub, the production capacity could be increased to 50,000 annually.

The 1.3 litre Swift, a facelift to Maruti’s image as a car maker which also cares about style and looks, is likely to be available in three variants — LXi, VXi, and Zxi — with its top-end version (ZXi) laced with automatic climate controls and a keyless entry.

The localisation of the Swift, during introduction, would be as high as 85 per cent. In two years from now, indigenisation is expected to reach 90 per cent, they added. — UNI

Subsidy for creating jobs likely
Manoj Kumar
Tribune News Service

New Delhi, May 16
The government may provide subsidy to employers in small and medium units to encourage these to train unskilled workers and retain them for at least for 200 days in a year.

The proposal has been submitted by the National Commission on Enterprises in the unorganised sector, headed by Mr Arjun Sengupta. The commission has recommended that to provide employment to the educated unemployed youth in the urban areas, the government should consider facilitating them to get training in new fields by subsidising their employers.

In a concept note submitted to the Ministry of Small- Scale Industries, the commission has suggested that government should subsidise the wage cost of employees for a period of 200 days to ensure their training, provided the employers concerned in the market undertake to retain them for at least 200 days in a year.

According to information available from the ministry, the government has initiated the process of inter-ministerial consultation on the proposal, and a final decision is likely to be taken soon. The scheme is expected to create employment opportunities, especially in the fast- growing textile, auto component, retail, hotel and agro-processing sector.

The Ministry is already running a scheme “Trade Related Enterpreneurship Assistance and Development (TREAD) for Women” to assist them get entrerpreneurial skills.

Minister of Small- Scale Industries and Agro and Rural Industries Mahabir Prasad said:” Apart from the credit rating scheme and increase in the SSI limit, the government will provide all help to employers to expand their business and create new employment opportunities.”

Under the Rural Employment Generation Programme (REGP), the government has fixed a target of creating additional 10 lakh employment opportunities in the next two years. It will include 47,000 employment opportunities in Punjab, 30,000 in Haryana, 26,000 in Himachal Pradesh and 28,000 in J&K. 

BJP seeks inquiry into banks’ public issue scam
Tribune News Service

New Delhi, May 16
The BJP today demanded a thorough probe into what they called a “bank public issue scam”, involving three nationalised banks — Punjab National Bank (PNB), the Allahabad Bank and Oriental Bank of Commerce (OBC) — and charged the government of “rigging prices” and “helping manipulators”.

BJP spokesperson Prakash Javadekar today claimed that the public issues of the PNB and Allahabad Bank in March and April, 2005, respectively, were preceeded by unusual price movements, which eventually led to huge losses to small investors.

Mr Javadekar claimed that in all the public issues of these banks, “curious high-voltage activity took place in their scrips on the eve of the issue; which resulted in price moving unreasonably upward”.

Premia were fixed at high-levels and the “pre-issue high activity created hyupe”. “Investors invested in these scrips and the markets opened with low rates, resulting in huge losses, and shattering the confidence of the investors”, he remarked.

The BJP spokesperson pointed out that in January, the general price level of the PNB shares was between Rs 350 and Rs 370. However, suddenly there was a high turnover in the shares preceding the day when the public issue of PNB hit the market and the rate shot up to between Rs 500 and Rs 530.

The issue price of the PNB public issue was Rs 390, but it opened at Rs 349 after the issue resulting in a loss of Rs 328 crore, Mr Javadekar said.

Similarly, in the case of Allahabad Bank, the issue was priced at Rs 82, but opened in the market at Rs 76 after the issue. Mr Javadekar said that the resultant loss to small investors was in excess of Rs 500 crore.

These price movements, had a negative bearing on the confidence of small investors and found manifestation in the public issue of the Oriental Bank of Commerce (OBC).

“This affected the OBC issue, where small investors applied for only 34 lakh shares while their quota was 1.62 crore shares”, he said. 

RBI norms on credit cards unfair: CERC

New Delhi, May 16
Terming the RBI’s proposed norms on credit cards as “unfair and unilateral”, Ahmedabad-based consumer forum CERC today proposed legislations to safeguard the interest of cardholders and rein in the powers of issuer banks or companies to recover dues.

“The printed conditions (of credit cards) are unilateral and unfair, presented to consumers on a take-it-or-leave-it basis leaving no chance for any question or negotiation,” the Consumer Education and Research Centre said in its suggestion to the RBI.

Though the RBI’s working group referred to various laws practiced worldwide, the CERC said it failed to report two specific laws — the Fair Debt Collection Practices Act of the US and the Credit Contracts and Consumer Finance Act of New Zealand.

The US law prohibits recovery of dues from credit card holder by any other agencies except through the process of law, while the New Zealand law provides insurance coverage and right to cancel the contract.

The CERC favoured insurance cover for lost, stolen and misplaced cards to protect the interest of consumers.

It also opposed the passing of information of credit card holders to any other agencies except banks and credit information bureau. — PTI

SBI, HDFC sell part of stake in CIBIL

Mumbai, May 16 
The State Bank of India (SBI) and Housing Development Finance Corporation Ltd (HDFC) have divested 23.75 per cent stake each in Credit Information Bureau India (CIBIL) to nine new investors, including ICICI Bank, Punjab National Bank (PNB), HSBC, Citibank and Sundaram Finance Ltd. This follows RBI’s statement in the annual Monetary and Credit Policy 2004-2005 that credit bureaus should have a sufficiently diversified ownership with no single entity owning more than 10 per cent of the paid-up capital in the first stage, and 5 per cent later.

India’s first credit information bureau was set up by SBI and HDFC with 40 per cent stake each while Dun & Bradstreet Information Services India Private Ltd (D&B) and Trans Union International Inc (TU) held 10 per cent each, CIBIL said in a press note here today. — PTI

PNB open to mergers, acquisitions
Tribune News Service

Chandigarh, May 16
Punjab National Bank (PNB), the third largest bank in the country that did a business of Rs 1,63,579 crore during the last fiscal, is not in favour of collaborations with private banks in any sector in the present scenario of emerging globalisation.

Mr S.C Gupta, who recently took over as Chairman and Managing Director of PNB said: “We are very open to mergers and acquisitions (M&A)” but added that they would like to maintain an independent identity for “we are the second largest public sector bank”. “However, we will consider acquisitions if there is the required business potential and our stakeholders and staff were happy,” he said.

Pointing out that during the next two to three years their focus would be on garnering volumes, he said that it could be through expanded deposit mobilisation or diversified lending operations. He proposed to capitalise on the high visibility and market acceptability the bank commanded.

Mr Gupta said the deposit base would be expanded more evenly by tapping the rural and semi-urban areas, where private and foreign banks still lacked presence. “More branches would be opened up in small towns and rural areas down south. The thrust would be more on middle and retail business where the safety of assets was assured and returns on an acceptable level,” he said.

Keeping options open on acquiring a foreign bank, PNB has recently got approvals for setting up a representative office in Dubai in June this year. It already has representative offices in the UK, Shanghai, and Hong Kong, besides a branch in Kabul. The bank would also explore the possibility of setting up operations in few other countries overseas, he said, while adding that the branches would be added wherever there was business potential to increase its international presence.

A-I ties up with Pierre Cardin, BBC for image makeover

London, May 16
Famous French haute couture king Pierre Cardin will design the inflight employees uniform for Air-India. The flagship carrier is re-positioning itself as a premium airline that keeps up with the changing style and trends, said its Director for public relations Jitender Bhargava.

AI has also tied up with BBC World for news updates on board.

Cardin was in Mumbai recently to finalise designs to be introduced by the airline this winter.

Major airlines likes Air France, SAS, British Airlines and others have already gone for a change or in the process of introducing new uniforms. Yves Saint Laurent, Richard Tyler, Peter Weiss and a host of other designers have designed uniforms for famous airlines.

Three leading Indian designers — Ritu Beri, Satya Paul and Tarun Tahiliani — have made presentations in Cardin’s presence. The second round of collections, incorporating some of the suggestions made by Cardin, will be made in June. The final presentations of the selected apparels are scheduled for display during fashion shows on September 16 and 18. — UNI

IA may convert B-737 passenger planes into freighters
Tribune News Service

New Delhi, May 16
The Indian Airlines Board today gave in-principle approval for conversion of five B-737, which are currently being operated by Alliance Air, into freighters, for the launch of dedicated operations once Alliance Air inducts A-319 aircraft on lease, beginning winter schedule.

The Rs 2,500 crore air express cargo market is seeing a 20 per cent growth year-on-year traffic growth and is expected to outpace that of passenger boarding’s over the next 20 years.

These five aircraft are planned to be operated on the hub and spoke pattern, which suit the express cargo market needs. The service is being envisaged from the metros of Delhi, Mumbai, Kolkata, Chennai, Bangalore and Hyderabad, with Nagpur. The dedicated freighter operations will enable IA to service the courier market even end, offering a reliable, 24x7, door value for money product.

J&K may hold food fest in Lahore
Tribune News Service

New Delhi, May 16
With its food festival in Dubai receiving a good response from expatriate Pakistanis, the J & K Tourist Development Corporation (JKTDC) is hopeful of an invitation from Pakistan to hold a similar food festival in Lahore.

Jammu and Kashmir Tourism Minister Ghulam Hassan Mir said the recently-held food festival in Dubai had been very successful. The government had not received any formal invitation from Pakistan so far.

Pact on VAT

UNI adds from Srinagar: The Jammu and Kashmir Government and valley-based traders have reached an agreement on the implementation of VAT in the state. However, the traders’ body has sought more time for switching over from sales tax to VAT. At a meeting with representatives of the Kashmir Traders’ and Manufacturers’ Federation (KTMF) here, state Finance Minister Muzaffar Hussain Baig reiterated that the government was committed to facilitating the switch-over from sales tax to VAT. 

Protesters invade Land Rover unit

London, May 16
Greenpeace protesters, including the head of its British Branch, invaded a Land Rover factory in central England today to protest at the production of “climate-wrecking” Range Rovers.

The environmental group said some 35 volunteers, dressed as staff, breached security at the West Midlands plant in Solihull around 7 am (11.30 a.m. IST) to demonstrate against greenhouse gas emissions. They locked themselves to the car’s assembly line to halt production.

Greenpeace said it was seeking a pledge from parent company Ford to stop making and marketing the cars for the city market.

“Making cars like this for urban use is crazy when 150,000 persons are dying every year from climate change,” Greenpeace representative Ben Stewart said. — AFP

IFC commits $ 4 m equity
Tribune News Service

New Delhi, May 16
The International Finance Corporation (IFC), the private sector arm of the World Bank group, has made an equity commitment of up to four million dollars to the APIDC Biotechnology Fund, a private equity fund formed to invest in start-up and early stage life sciences businesses in India.

The first fund in India to focus exclusively on the life-sciences sector, this will seek early stage opportunities in areas such as healthcare, drug discovery, agriculture, dairy, environmental, and industrial applications throughout India, a statement issued by the IFC said.

BRIEFLY

Kotak Mahindra
New Delhi, May 16
Kotak Mahindra Bank Ltd today said it had allotted 42,600 shares as stock options to employees of Kotak Mahindra Old Mutual Life Insurance Ltd, one of the subsidiaries of the bank. The bank had granted these 42,600 shares under the employees stock option scheme and the employees stock purchase scheme guidelines, 1999. The exercise price of the options is Rs 200 per share. — PTI

New Directors
New Delhi, May 16
Mr A.K. Mathur and Mr K. Ravi Kumar have joined as Directors on the BHEL Board. While Mr Mathur is Director (Industrial Systems and Products), Mr Kumar has been designated as Director (Power), a BHEL press note said. Mathur was earlier Executive Director of the company’s manufacturing plant at Trichy while Mr Kumar was heading BHEL’s power sector marketing division as its Executive Director. — TNS

Best BSNL circle
Tiruchirappalli, May 16
The performance of the Tamil Nadu BSNL was the best among the BSNL circles in the country from January to March this year in the cellular telephone services, Mr L. Kannan, General Manager, India Mobile Personalised Cellular Services (IMPCS), Tamil Nadu circle, said here today. The Tamil Nadu circle was hosting 9.11 lakh connections now. The circle could be able to give around 9 lakh new connections after the setting up of three more main-switching centres before July, he said. — PTI

Top taxpayer
Tokyo, May 16
A fund manager headed the list of Japan’s top individual taxpayers in 2004, becoming the first company employee to reach the pinnacle, the National Tax Agency said today. Mr Tatsuro Kiyohara (46), paid 3.69 billion yen ($ 34.35 million) in income tax, mostly from commission earnings through his work at the Tower Investment Management Co. While Mr Kiyohara is estimated to have earned 10 billion yen last year by working for the firm, some 30 per cent — the largest group of those in the top 100 — won their spots due to gains from stock transactions, Kyodo news agency said. — Reuters

Larsen & Toubro
Beijing, May 16
Larsen & Toubro Ltd will start sourcing from China for the Indian as well as world markets. “In our endeavour to become a major international player, global integration of our value chain is imperative. To stay globally competitive, we recognise the important role China can play in our corporate strategy,” L & T Chairman and Managing Director A.M. Naik said here. The company formally opened its Beijing representative office here today. L&T, which ventured into China by opening its Shanghai representative office in September, 2004, envisages engagement at multiple levels with Chinese industry. — PTI

Nikon profit
Tokyo, May 16
Japanese camera and chip equipment maker Nikon Corp posted a surge in annual operating profit today on stronger sales of steppers and high-end digital cameras, and forecast a bigger-than-expected profit this business year. The group operating profit came to 30.5 billion yen ($ 283.9 million) in the year ended March 31. The company projected a group operating profit of 33 billion yen for 2005/06, above the consensus of 30.6 billion yen. — Reuters

Microsoft launch
Los Angeles, May 16
Microsoft Corp., has released the finalised version of its desktop search tool, taking aim at Google Inc. and other rivals in the increasingly competitive search market. The MSN Search Toolbar, which was introduced on a trial basis five months ago, provides a way to search for e-mail, documents and other data stored on hard drives much more quickly and efficiently than the ‘’Find’’ function found in Windows. Google, which became the web’s top search engine after its debut in 1998, was the first major search company to roll out a test version. Search rival Yahoo Inc. released its test, or beta, desktop search tool in January. — Reuters