Accent launched in city
CHANDIGARH, Oct 24 — At an impressive gathering last evening at the Chandigarh Club, Charisma Goldwheels Pvt Ltd the local dealer for Hyundai, launched the new Accent car within days of its worldwide launch.

Race on for insurance cake
LONDON, Oct 24 — The race is on for the big bucks in insurance, and British companies believe they have a headstart over insurance firms from the USA in getting into the potentially large insurance market in India.

Panel on law to wind up firms
NEW DELHI, Oct 24 — The Government has constituted a 10-member expert committee to examine the prevailing law to wind up proceedings of companies to remodel in line with the latest developments and innovations in corporate law and governance.

Talks to end LML legal battle likely
NEW DELHI, Oct 24 — Piaggio and Singhanias, joint venture partners of LML Ltd, have agreed to out-of-court negotiations to amicably resolve all their disputes currently going on in various courts.

Show-cause notice issued to BPL
NEW DELHI, Oct 24 — The MRTPC has issued a show-cause notice to BPL for allegedly breaching an order restraining it from advertising its alkaline battery as “the longest lasting battery in the world”.

ICICI pulled up in REPL Engg case
NEW DELHI, Oct 24 — BIFR has pulled up ICICI, the operating agency of loss-making REPL Engineering for the delay in preparing the report on the compay’s financial position.

TTK to hive off unit
NEW DELHI, Oct 24 — TTK Textiles Limited has decided to hive off its loss-making spinning unit into a separate company and concentrate on promoting its Tantex brand of undergarments.

• Inflation rises to 2.51 per cent

Corporate sector bullish: CII survey

NEW DELHI, Oct 24 (PTI) — The corporate sector is bullish about short-term business prospects with the feel-good factor returning to the industry and aiding economic recovery, the CII business outlook has said. The survey released today said 55 per cent of the respondents expected the general business situation to improve in the next six months.

The previous survey in April this year had only 39 per cent of the respondents in the ranks of optimists.

Only 6 per cent of the respondents were pessimistic about the short-term prospects for business with 39 per cent of the respondents expecting the present trend to continue.

Of the responding corporates, those expecting to authorise higher capital expenditure had increased from 60 per cent in the previous survey to 80 per cent.

Among them, 42 per cent expected to authorise higher capital expenditure between 5 and 10 per cent, 23 per cent between 10 and 20 per cent, 10 per cent between 20 and 50 per cent and 5 per cent above 50 per cent.

Only 20 per cent of the respondents expected to authorise less capital investment in the next six months as against 40 per cent in the previous survey.

The survey covered responses from 205 CII members and related to the actual performance of the industry during April to September 1999 and the forecast for October to March 1999-2000.

Political instability, global slowdown, cost of funds and domestic and international competition were listed by the survey as the major constraints to expanding ouput in the next six months.

Rated high among the financial obstacles were interest rates by 57 per cent of the respondents followed by bank paperwork and bureaucracy by 40 per cent and collateral requirements by 30 per cent.

While 63 per cent of the respondents were optimistic about the value of output in the next six months, 11 per cent of the respondents envisaged lower value of output and 26 per cent expected the trend to continue.

In the past six months, the value of output was higher for 47 per cent, stagnant for 26 per cent and lower for 27 per cent of the respondents, the survey revealed.

For production expectations, while 92 per cent of the respondents see an increase, only 8 per cent foresee a decline in production in their organisation.

A majority (44 per cent) of the respondents to the CII survey forecast a high growth in production of above 10 per cent as against 36 per cent in the last survey.

An additional 19 per cent forecast a production growth between zero to five per cent and 29 per cent foresaw it between 5 and 10 per cent.

According to the survey, 43 per cent of the respondents expected profit margins to improve, 33 per cent expected the same trends to continue and 24 per cent foresaw lower profits during the next six months.

In the past six months, the profit margins were higher for only 33 per cent of the respondents, same for 23 per cent and lower for 44 per cent.

The current pick-up in exports and improved short-term prospects were also reflected in the higher level of optimism in the exporter community with 64 per cent of the 115 respondents engaged in exports optimistic about export prospects in volume terms during the next six months.

Another 25 per cent expected the same trend to continue while 11 per cent foresaw a deceleration in export prospects.

Maruti, Telco and Bajaj exports fall

NEW DELHI, Oct 24 (PTI) — Leading automobile manufacturers including Maruti Udyog, Telco, Hero Honda and Bajaj posted negative growth in exports during the first half of the current fiscal against the export performance in the same period last year.

During April-September of the current fiscal, all segments of the automobile sector including passenger cars, two-wheelers and commercial vehicles witnessed a fall in exports, according to the data compiled by the Society of Indian Automobiles Manufacturers (SIAM).

Against an impressive growth trend witnessed by the automobile sector on home turf during April-September of the current financial year, passenger car exports declined by 15 per cent followed by commercial vehicles (11.4 per cent) and three-wheelers (5 per cent) against the comparable figures in the same period a year ago.

The fall in exports was much sharp at 29.2 per cent in case of two-wheelers mainly because of a 35.2 per cent drop in exports recorded by the scooters segment during the reference period, according to the data compiled by SIAM.

Maruti Udyog, which saw a 15.8 per cent sales growth in the domestic market, witnessed a 15.7 per cent fall in exports during the first six months of the current fiscal against the same period last fiscal.

Th decline in exports was much sharp at 93 per cent in the case of Telco, which saw its domestic sales growing by 16 times in the reference period.

Exports of passenger cars declined by 15 per cent to 9,095 units in the first half of the fiscal from 10,700 vehicles in the corresponding period of 1998-99.

The scooter and motorcycle segments posted a 35.2 per cent and 12.3 per cent drop in exports growth to 10,197 units and 16,039 units, respectively, in the period from 15,740 units and 18,301 units exported in April-September 1998-99.

Moped exports dipped sharply by 41.8 per cent to 10,072 units in the period from 17,299 units.

The commercial vehicles segment was also not an exception as the segment saw a 11.4 per cent exports fall to 3,658 units in April-September this year from 4,131 units in the first half of the last fiscal.

Lowest fall in exports growth of 5 per cent was recorded by three-wheelers as the segment saw a sales of 10,168 units in the overseas market in the period as compared to 10,707 units in the same period a year ago.

Exports of Bajaj scooters were down by 37.6 per cent as the company sold only 2,747 vehicles in the first six months of the fiscal from 4,400 units in the corresponding period of 1998-99.

LML Ltd witnessed a 54.7 per cent fall in exports to 2,734 units during the period from 5,999 units in the same period last fiscal.

Motorcycles exports by Bajaj was also down by 39 per cent to 2,635 units from 4,319 units in the same period.

Hero Honda registered a 37.3 per cent drop in exports to 4,191 units in the first half of the current fiscal from 6,686 units in the same period last fiscal.

Kinetic Motor Company’s exports declined by 12.7 per cent to 4,354 units from 4,990 units in the same period of 1998-99.

However, TVS Suzuki posted a positive exports growth in scooter motorcycle and moped segments by selling 362 units, 1448 units and 1391 units, respectively, in the global market during the period against 351 units, 787 units and 566 units in the same period last financial year.

Accent launched in city
Tribune News Service

CHANDIGARH, Oct 24 — At an impressive gathering last evening at the Chandigarh Club, Charisma Goldwheels Pvt Ltd the local dealer for Hyundai, launched the new Accent car within days of its worldwide launch. The Accent represent state-of-the-art technology with safety features.

This sleek-looking sedan with updated styling has all the luxurious features in a range of interesting colours. The 4-cylinder 1495 cc engine has power delivery characteristics that are perfectly matched to driving needs in slow and high speed traffic. With power steering and independent suspension, the Accent gives one a smooth ride.

The most interesting feature of the Accent is its competitive price. At a price substantially below similar luxurious sedans, the Accent is within the reach of the common man who is aspiring to enjoy the benefits of a top-of-the line car at affordable prices, ranging from Rs 5.28 lakh for a standard model to Rs 5.77 lakhs for a “fully loaded” model with air-conditioning, power steering, power windows and central locking of the “Accent’ given an average of 14 km per liter in normal driving conditions.

The function was attended by hundreds of satisfied Santro clients who evinced interest in the new Accent car with its competitive pricing.

The evening was also celebrated as the Ist anniversary of the Santro.

Another Indian makes billions
From Bala Murali Krishna

NEW YORK, Oct 24 — The market debut of Sycamore Networks, a fibre optics networking firm, is being called the the hottest of the year and has also vaulted its Indian American founder to the ranks of a billionaire.

Founded by Gururaj Deshpande, the Chelmsford, Massachusetts-based company’s stock, offered at $ 38 per share, opened at an astonishing $ 280 when trading began on Nasdaq, but closed at a lower $ 184.75, still over seven times the offer price.

The gains for the company, which enables fibre optic networking technology, were still larger because the lead managers, Morgan Stanley Dean Witter, more than doubled the offer price from the initial range of $ 18 to $ 20 per share after unexpected level of interest from investors.

Deshpande, who had sold his earlier venture, Cascade Communi-cations, to Ascend for $ 3.7 billion, holds over a fifth of Sycamore’s stock. At the stock’s closing price, Deshpande’s shares were worth over $ 3 billion and the company itself was valued at about $ 14.5 billion.

Deshpande is an entrepreneur who has brought powerful academic insights into the real business world. In 1990, still years before the Internet would turn so ubiquitous, he started Cascade on one central principle: every computer in the world will be connected to another.

Deshpande, a graduate of the Indian Institute of Technology (IIT), Chennai, received a doctorate degree in data communications from Queens University in Kingston, Canada. He then went on to join the faculty there. He was a Professor there before a chance meeting with a Motorola executive brought him into the corporate world.

He worked for a Motorola subsidiary, Codex Corporation, in Canada but his first venture as an entrepreneur bombed. Entering the USA, he co-founded Coral Network Corporation. In 1990, he broke up with his partner and started the hugely successful Cascade. — IANS

Race on for insurance cake
From Sanjay Suri

LONDON, Oct 24 — The race is on for the big bucks in insurance, and British companies believe they have a headstart over insurance firms from the USA in getting into the potentially large insurance market in India. “We are very excited by the news,” John Cook of the Association of British Insurers said following reports that the Vajpayee’s Cabinet had cleared the draft Insurance Regulatory Authority (IRA) Bill. Even with a cap of 26 per cent on foreign investment, insurance firms are seeing business worth billions of dollars.

“British companies will have a clear advantage,” Cook said. Several British firms dominated the insurance business in India before the nationalisation of life insurance in 1956 and general insurance in 1972.

Chris Pountain, General Manager of the international business of Commercial and General Union, says British firms will go in with the advantage of familiarity with insurance laws and regulations in India that are patterned on British laws.

British firms have been in India longer, with liaison offices running even when the companies have been out of business directly, Pountain said. British firms could have the advantage also of language and close cultural ties.

Whatever the advantages, however, British firms are gearing up for strong competition from the US giant AIG which plans to enter the Indian market in a tie-up with Tata.

The size of the market that foreign insurance firms are looking at is hard to estimate. “But once foreign companies come in we expect a strong growth in the insurance market in India,” Pountain said. “We will design products and service levels which will excite the Indian consumer. Companies will be targeting the Indian middle class which will tend to buy new insurance products,” he said.

Insurance firms have begun specific planning already. “There’s a lot of thinking going on how we will operate in India,” Pountain said. “We will set up offices in several places and also a head office which would be pretty heavily staffed,” he said.

Cook called the quick developments on insurance in India a great challenge and a great opportunity. The network of GIC and LIC cannot be written off lightly. These are powerful Indian participants with a hugely well-established network. It will be a challenge to find new ways in a well-establshed market. But while looking with enthusiasm at the new openings, insurance firms will have to see ways in which the Bill becomes law and the precise ways in which insurance regulatory authorities grant licences.

But British insurance firms will look to renew their contriubution to the Indian insurance market under whatever terms are set out by the Indian law. Historical advantages alone will not help, Cook said. India is not what it was 50 years ago, and British companies who have had long experience in India are looking forwards, not looking back. The new business moves will take on board the huge diversity of economic life and personal life in India. But a thrust area would be finding ways to mobilise personal savings. — IANS

Panel on law to wind up firms

NEW DELHI, Oct 24 (UNI) — The Government has constituted a 10-member expert committee to examine the prevailing law to wind up proceedings of companies to remodel in line with the latest developments and innovations in corporate law and governance. The committee, headed by retired Supreme Court Judge K.S. Paripoonanan, will suggest procedural reforms followed in insolvency proceedings of companies to avoid unnecessary delays in tune with the international practice.

The members of the committee include Prof C.G. Raghavan, Mr A.V. Sambhashiva Rao, Vice-President, Bharatiya Mazdoor Sangh, Mr V.K. Bhasin, Legislative Department, Mr G.M. Ramamurthy, Chief General Manager, Industrial Development Bank of India, Mr U.P. Mathur, and Mr Shardul Shroff, advocates.

The committee is to submit its report in six months from the date of its first meeting and decide its own procedures after consulting experts and the Law Commission.

The terms of reference of the committee are to examine and recommend on the desirablity of the existing law to avoid delays and suggest to the management about the winding up proceedings and adjudication of insolvency of companies.

It will also be responsible for distributing assets of companies and propose a self-contained law for winding up of companies having regard to the Sick Industrial Companies Special Provision Act, 1985, and the Securities Contracts Regulations Act 1956.

Talks to end LML legal battle likely

NEW DELHI, Oct 24 (PTI) — Piaggio and Singhanias, joint venture partners of LML Ltd, have agreed to out-of-court negotiations to amicably resolve all their disputes currently going on in various courts.

In a joint press release issued here today, Piaggio CSPA, LML Ltd and the Indian promoters said they would “move all the legal authorities to suspend the legal proceedings”.

With the move for an out-of-court settlement, Piaggio is expected to withdraw its cases from the Supreme Court, the Company Law Board (CLB) and the International Chambers of Commerce (ICC), Singapore.

Both partners of LML were involved in a bitter legal battle after Singhanias took Piaggio to court to acquire the Italian company’s 23.6 per cent share in LML.

Singhanias had cited a clause in the joint venture agreement based on which the Indian partners enjoyed the right to acquire the stake of Piaggio following the death of its owner Giovanni Agnelli.

Singhanias had pleaded before a Kanpur district court that the matter should not be referred to the ICC as Piaggio Vespa B.V., the company which holds LML’s shares, was not a party to signing the joint venture agreement.

Show-cause notice issued to BPL

NEW DELHI, Oct 24 (PTI) — The MRTPC has issued a show-cause notice to BPL for allegedly breaching an order restraining it from advertising its alkaline battery as “the longest lasting battery in the world”. Directing BPL to show cause why an action in contempt should not be taken against it for breach of the order issued‘ in December 1998, the commission also accepted a contempt application filed by Duracell (India).

The case has now been adjourned to November 12.

In its application to the commission, Duracell alleged that BPL had violated MRTPC’s directions in defiance of the restraint order by running the objectionable advertisement again.

“BPL Ltd is directed not to carry on its advertisement campaign claiming its alkaline battery to be the longest lasting in the world in any manner and in any form and through any media, whether print or visual or through any packaging material,” MRTPC had said in its 1998 order.

BPL had then appealed to the Supreme Court in April 1999 which also upheld the MRTPC order.

ICICI pulled up in REPL Engg case

NEW DELHI, Oct 24 (PTI) — BIFR has pulled up ICICI, the operating agency of loss-making REPL Engineering for the delay in preparing the report on the compay’s financial position. The two-member Bench expressed its displeasure at the manner in which ICICI had functioned as the operating agency of REPL Engineering.

BIFR in the last hearing held in August this year has noted that the report and the recast balance sheet had not been made available by ICICI to the company and all the secured creditors of the company.

Due to the un-availability of the report, the discussion on the sickness of the company could not be taken up.

The board had appointed ICICI as OA to enquire into the accounts of the company with a view to verify the genuineness of the provision and transactions as reflected in the balance sheet before taking decision over the sickeness of the company.

But in the recent hearing on October 4, ICICI informed BIFR that the networth of the company was positive as per the report prepapared by it.

However, ICICI did not submit the report to BIFR considering the comments of REPL Engineering. But REPL denied any receipt of the report from ICICI.

But the various creditors of the company informed BIFR that they had received the report from ICICI.

Due to various delays, BIFR could not take any decision on the sickness of the company and would take up the case in December.

TTK to hive off unit

NEW DELHI, Oct 24 (UNI) — TTK Textiles Limited has decided to hive off its loss-making spinning unit into a separate company and concentrate on promoting its Tantex brand of undergarments.The sick company will introduce a VRS and sell off the fixed assets of its paper tubes and cones division before shifting its attention to its brand promotion effort.

By hiving off its spinning unit the company will reduce its current share capital to Re 1 per share and allot fresh shares or securities to the promoters TTK Krishnama-chari and Company and TTK Prestige Limited — totalling Rs 5.35 crore against money due to them.

Inflation rises to 2.51 per cent

NEW DELHI, Oct 24 (PTI) — The inflation rate shot up by 0.56 percentage points to 2.51 per cent for the week ended October 9, due to a steep 40 per cent increasn the diesel prices. The sharp rise in the inflation rate is mainly on account of a 6.2 per cent rise in the index for fuel, power, light and lubricants following the 40 per cent increase in the diesel oil prices announced on October 5.

Infotech block

THOSE who missed out on all the fun in the secondary market while the stock prices of Infosys technologies and NIIT zoomed need not worry. Or so says a veteran BSE bull operator. He advises joining the party at the counters of Polaris Software now and at the counter of Hughes Software when it gets listed. Want to join the party?

IL&FS

With ICICI and IDBI slowly but steadily losing the aura of invincibility that surrounded them, the progress of IL&FS onto their protected turf has gone relatively unnoticed. Their success, whispers a market expert revolves around their innovativeness. Take a look at their latest equity fund offering — there is an inbuilt trigger mechanism that will intimate investors that the rate of return they were angling for has been touched offering them the option of disinvesting. Well, that surely is innovative!

Can Fin Homes

The grapevine is agog with rumours that the New Bull is slowly accumulating the shares of Can Fin Homes and that its share price will cross Rs 100 within a year. Given that it is currently priced below Rs 20, its worth a look in, doesn’t it?

LML

With a legal victory in the international court, LML’s revival in fortunes has been heralded or so swears a veteran DSE broker who predicts that this company will now regain its lost position and again give Bajaj Auto a run for its money in the scooters segment. Any takers?

Air India faces aircraft scarcity

IN every bilateral air negotiation India is the loser. This is because Air India and Indian Airlines do not have spare aircraft to fly to other destinations, no matter how lucrative. Placed under this difficult situation, Air India, in particular, withdraws flight from one route to fly on another. It draws criticism from several quarters in this country and abroad.Lofty promises were made when bilateral talks with US representatives had been held in Rajiv Bhavan 2-3 years ago. It was categorically said that India would expand its services to the USA. Different destinations were indeed chosen but the result was negligible. Because Air India did not have spare aircraft to fly on different destinations in the USA oftner than it could be possible.

Similar kinds of talks with representatives from the UK, Germany and the USA are scheduled soon. But there is every likelihood that talks might be deferred for a fortnight or more because there is a change of ‘guard’ in the Civil Aviation Ministry. Mr P.V. Jayakrishnan has been replaced with Ravindra Gipta as Secretary. He needs sometime to study the intricate problems that are causing concern to the industry.

The carriers from the USA are totally “commercial”. They are mostly private airlines. When the going is good for them, they keep on operating. But when they find the operations are not profitable, they withdraw flying. United Airlines, for example, discontinued operations suddenly on the plea of ‘non-viability’. No one, even Directorate-General of Civil Aviation, could ask its ‘bosses’ the reasons for discontinuation.

While US aviation authorities are tough, no less are British bigwigs. Heathrow Airport, perhaps the busiest international airport, can be a lucrative unit for Air India if it secures a rewarding slot. But it is next to impossible because British authorities believe in “heads we win, and tails you (India) lose”.

India’s share of traffic to the Western countries, like, the UK, Germany and France has dwindled quite a bit in recent years. The industry is aware of this. No wonder, British Airways, Air France and other carriers are clamouring to increase their flights ex-India. They all know India is a lucrative market. In the talks, which will be held soon if not this week-end, will reveal how tough India can act in this bilateral negotiation. The foreign bureaucrats have a way to ‘tie’ over vex problems, while Indian officials are known for their weakling attitude.

With the installation of the new Government, Boeing and Airbus Industrie, have restarted issuing statements. Each manufacturer talks about his product emphasising that is the best. While British Airways announced selection of A-318 (12 firm orders and 12 optional), Boeing are shouting about the usefulness of Boeing 717. Each manufacturer claims that his aircraft will be the most useful for the country.

No one knows which aircraft will eventually be chosen to fly on national and international routes. Regardless which is chosen, one thing is certain that India needs more aircraft. But will it be possible to take a decision in this regard in the near future? It looks doubtful because Indian officials and politicians continue to procrastinate.