Thursday, September 16, 1999
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B U S I N E S S | Thursday, September 16, 1999 |
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High
court upholds PSU chiefs’ appointments |
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Escorts Ltd rules out
bonus issue Apollo AGM turns noisy Name of game is ‘hit and
run’ Ceat Tyres targets 14 per cent
growth Reliance hikes prices |
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High court upholds PSU chiefs’ appointments NEW DELHI, Sept 15 (PTI) — The Delhi High Court today upheld the Government decision to appoint heads of certain public sector undertakings (PSUs) without the approval of the Public Enterprises Selection Board (PESB) saying that PESB was not a statutory body. Dismissing a public interest writ petition challenging the appointment of the heads of 10 PSUs, including the Food Corporation of India, Airport Authority of India, Air India, Indian Airlines, Steel Authority of India, made during 1995-96, a Division Bench headed by Chief Justice S.N. Variava said PESB was set up in 1974 under a policy decision by the Government which could be changed at any stage. “In our view it is not necessary or proper for the court to issue direction in this regard,” the Bench having Justice S.K. Mahajan as other judge, said adding that except the Chairman of the Power Finance Corporation, all other heads had retired. Appointments of the heads of these PSUs was challenged by advocate B.L. Wadhera on the ground that these were done without PESB’s approval. The court said that the Government through its circular in March 1987 had made modification in its 1974 order, making the role of PESB that of an “advisory” in the nature, and therefore, its recommendation was not “mandatory”. With this, the
appointments of Mr P.C. Sen (IAS) as the MD of IA, Mr
Brijesh Kumar (IAS) as MD of AI, Mr M.D. Asthana (IAS) as
MD FCI, Mr M. Gopalakrishnan (IAS) as MD REC, Mr Uddesh
Kohli as Chairman or MD of PFC and Mr K.K. Mathur (IAS)
as MD ITPO have been cleared. |
Escorts Ltd rules out bonus issue NEW DELHI, Sept 15 (PTI) —Escorts Ltd has embarked on a restructuring programme to raise its market capitalisation six times to Rs 6,000 crore in the next couple of years. The company will consolidate its position in core areas and float new ventures, group Chairman Rajan Nanda told PTI. The increase in market capitalisation will be without enhancing the equity base of Rs 72 crore. “There will be no bonus share and no public offerings,” he clarified. The company has already shed equity in Escorts JCD Ltd and Hughes Software Systems and is planning a similar exercise in Escorts Hospital and Research Centre Ltd and Escorts Construction Equipment Ltd. In the last three months, Escorts’ market capitalisation has gone up from about Rs 450 crore to about Rs 1,400 crore, with its share price appreciating from Rs 62 on June 1, to Rs 203 now. Escorts Ltd, whose
turnover is targeted to increase to Rs 1,600 crore during
the current fiscal with the net profit projected to grow
by over 70 per cent at Rs 144 crore, will become a
debt-free company in the next two-three years.
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Sinha to plead for more aid at Fund-Bank talks WASHINGTON, Sept 15 (PTI) — Finance Minister Yashwant Sinha will attend the Fund-Bank annual meeting beginning here on September 22 during which India is expected press for early clearance of pending World Bank projects. Sinha, who recently confirmed his participation in the Fund-Bank meeting during electioneering in his home constituency of Hazaribagh in Bihar, is expected to utilise this opportunity to step up developmental aid from World Bank, which is likely to cross $ 2 billion this financial year. India and the World Bank have already inked three major social projects involving an assistance of over $ 600 million from international financial assistance for water-shed management, AIDS control and primary education in States. Indian officials here said that several other World Bank aided projects are in various stages of negotiation and they will be taken up with bank officials during bilateral meetings. The annual Fund-Bank meeting is being held in the backdrop of the IMF’s observation that India’s growth has failed to pick up after its slowing down in 1997, partly reflecting a stalling of structural reforms and deterioration in government finances. This has been corroborated by India’s new Executive Director at the IMF Vijay Kelkar, who said the foremost reform measure that is required is to ensure fiscal health and suggested that Parliament should enact a Fiscal Responsibility Act to effect a statutory ceiling on borrowing particularly by States. Kelkar, who was formerly India’s Finance Secretary, said much of the thinking of Fund-Bank is shared by fiscal problems. Kelkar said the stock of public sector investments has increased to almost Rs 2 lakh crore at book value, but the return is less than 3 per cent. If these investments had been achieving comparable returns that efficient enterprises do, then the rate of return would have been two to three times higher. The difference between these is also an implicit subsidy paid by the tax payers. “Subsidies have become a fullstop for growth acceleration,” he said. Currently, he said, almost 80 per cent of private financial savings are being absorbed by public sector borrowing. Consequently, “a cruel choice is between higher inflation by printing of money or higher interest rates which choke investment and employment growth.” He suggested that Parliament should adopt a Fiscal Responsibility Act, which would limit the revenue deficits and budget deficits and safeguard the economy from a debt trap, as a number of countries have done. He also underlined the importance of “downsizing the role of Government and downsizing the Government while improving the quality of governance.” The most important outcome of the fiscal correction, he said, would be reduction of both short-term and long-term interest rates in the economy. At present, they are at an unprecedented levels of 6 to 8 per cent. “No country in the world has achieved a sustained growth rate with such high interest rates, he said, adding bringing the real interest rates in the neighbourhood of 3 to 5 per cent can trigger a spectacular growth boom throughout the economy.” Other reforms he suggested are reduction in tariffs and tackling of factor markets, including labour, loan, capital and natural resources market, besides reduction in State Governments’ deficits. With the acceleration of
reforms, Kelkar said, “there is no reason why India,
by the year 2020, cannot achieve a per capita income of
more than $ 1000 or more than half a lakh rupees (against
the present $ 390) and wipe out poverty and illiteracy
and also increase the life expectancy by 10 years or more
to become an economic superpower. |
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NEW DELHI, Sept 15 (UNI) — The annual general meeting (AGM) of the Indraprastha Medical Corporation Limited (IMCL), promoters of the Indraprastha Apollo Hospitals, today witnessed noisy scenes and near chaos when certain resolutions were placed for approval of the shareholders. The shareholders shouted slogans against the management even as Mr Omesh Saigal, IMCL Chairman and the Chief Secretary of Delhi Government, declared all the points of the agenda as carried through. Interrupting the 11th AGM of the hospital company, the shareholders criticised the board for not declaring any dividend since inception of the company in 1997 and demanded immediate announcement of dividends at the AGM itself. They also demanded the merger of IMCL, running the Indraprastha Hospital in Delhi with its promoter company running Apollo Hospital in Chennai to enhance shareholders value. On popular demand of the shareholders, the company had introduced a shareholders’ discount scheme which allowed a member to avail of 10 per cent discount on the room/bed rent and 15 per cent discount on preventive health check-up packages. The shareholders complained that the discount was minimal and demanded that it be raised to 50 per cent. The chairman carried through the audited balance sheet as on March 31, 1999 and the profit and loss account for the year ended on that date together with the report of directors’ and auditors’ thereon. The other business carried through by the Chairman included re-election of Mr Anil Thadani, Mr B.L. Paranjpe and Dr B. Venkataraman as Directors. He also carried through
special resolution re-appointing Brahmayya and Company
and S.C. Vasudeva and company as joint auditors of the
company.
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Name of
game is ‘hit and run’ MUMBAI: With the last settlement being a truncated one and there being a general sense of unease about the election results which could trigger off yet another round of political instability, market operators and institutional investors alike are preferring to play it safe and have already downed shutters to adopt a wait and watch attitude for the time being. The market sentiment has weakened a bit and some of the smaller operators have already started booking profits and exiting the market to watch from the sidelines till the election results are announced. Trading volumes too have turned thin and it seems quite unlikely that this trend will be significantly reversed till the electoral verdict is delivered. Traders could consider taking up long positions at the counters of ITC at Rs 945 (square up at Rs 980), and Pentafour Software at Rs 575 (square up at Rs 610). Short positions could be considered at the counters of Reliance Industries at Rs 205 (cover up at Rs 190) and ICICI at Rs 82 (cover up at Rs 72). The dark horse bet of
the week is Vanavil Dyes (Rs 60) in which Clariant has a
stake, while discerning long-term investors could pouch
the shares of AgRevo at the prevalent low price level. As
for traders, given the fact that the market movement is
likely to be horizontal rather than vertical the name of
the game remains “hit and run”. |
Ceat Tyres targets 14 per cent growth MUMBAI, Sept 15 (PTI) —R P Goenka controlled Ceat Ltd has set a sales target of around Rs 1400 crore for the current year while the profits of the company are expected to increase by 14 per cent over last year. In the first five months of the current fiscal, the company has recorded sales of Rs 533 crore which is 19 per cent more than the corresponding period last year, Vice-Chairman Harsh Goenka told shareholders at its 40th AGM here today. “In order to emerge as a market leader, the company’s management has set a growth target “of 14 per cent against a projected industry growth of 6 per cent,” he said. The company intends at least a one per cent growth in market shares in all the segments it operates in, Goenka said. At present, in scooter tyres it has a market share of 21 per cent, motorcycles 11 per cent and car tyres 19 per cent. Export turnover is expected to be around Rs 140 crore this fiscal, Goenka said. It mainly exports to the United States, West Asia, Africa and South America. Ceat’s exports last year dipped to Rs 128 crore from the previous year’s Rs 153 crore chiefly due to the South Asian crisis and lack of demand from the US and Latin American countries. Essel Packaging:
The Board of Directors of Essel Packaging
Limited yesterday announced payment of a special
“millennium” dividend of 150 per cent to its
equity shareholders. |
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MUMBAI, Sept 15 (PTI) —Reliance Industries today once again hiked the prices of its petrochemical products, polyethylene (PE) and polypropylene (PPE), with immediate effect. The company has raised the price of PE by Rs 2,000 a tonne within a fortnight to Rs 44,600 per tonne. Since August, the price had gone up by 10.9 per cent, RIL sources said here. The price of PPE is up
by Rs 3,000 per tonne from Rs 38,200 per tonne on
September 1 to Rs 41,200 per tonne, up by 17 per cent
since August 1. |
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| Bullion Gold Std Rs 4060 Gold 22-Ct Rs 3910 Silver Ready Rs 7845 Silver delivery Rs 7850 Forex Vardhman Spg ACMA chief |
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