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Saturday,
August 25, 2001, Chandigarh, India  
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‘Indo-Pak trade ties hinge on Kashmir’
Life insurance more than ‘tax-saving tool’
Investors allege fund diversion by Ritesh Ind
PM, states to discuss co-op credit system |
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Bharti to come out with public issue Income tax employees
launch agitation Punjab Govt to sell securities by auction Coop Bank releases
1069-cr loan to farmers NFL to revamp Panipat, Bathinda plants
ACC, Ambuja shares to rise
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‘Indo-Pak trade ties hinge on Kashmir’ New Delhi, August 24 “Progress on all issues must progress simultaneously, recognising Kashmir as the core issue”, Pakistan’s Commerce Minister Abdul Razak Dawood told industrialists at a meeting organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) here. “For any trade to flourish, it will have to fit in with the political and social environment. Hence it is important that Kashmir and other related issues come in”, he said adding:”the political bridge first has to be crossed”. Underlining the potential of Indo-Pak trade and commercial activities, Mr Dawood, however, said that the equations become complicated and challenging when these (commercial prospects) are factored into the political environment. “Business can only truly flourish if there is trust and confidence”, he said while seeking to clarify the perception that President Pervez Musharraf was unwilling to discuss anything apart from Kashmir. “Our President said to your leadership that progress on all issues must progress simultaneously, recognising the Kashmir as the core issue”, Mr Dawood said. For trade to flourish and to put it on a long term and sound footing, he said that it is important to address the political and social issues and build confidence among both the countries. “We need to develop a step by step approach to evolve the system and make steady progress”, he said. It is important that both countries sit down and work on the issues that will create a level playing field which will also identify the “speedbrakers and remove them”. Stating that Indo-Pak trade holds out a lot of promise, Mr Dawood said that there are immense challenges and difficult and tough issues to be overcome. Elaborating on establishment of a level playing field for enhancement of trade between the two countries, he said that historically India has been less liberalised than Pakistan. “The tariff rates in India are high and there are umpteen number of non-tariff barriers. Also there are greater subsidies in India’, Mr Dawood said. On the issue of the proposed Indo-Iran gas pipeline which eventually may have to pass through Pakistan, Mr Dawwod said that the issue was not discussed during his meeting with the Indian Commerce Minister yesterday. “It is a bit too early at this moment”, he said adding currently the feasibility studies are in the process of being undertaken. On the question of MFN status, he said that MFN is pointless unless the obstacles to trade are removed even as he assured to consider allowing imports of a number of additional Indian items. However, there was need for reciprocal treatment from the Indian side also, he added.India has already granted MFN status to Pakistan. |
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Life insurance more than ‘tax-saving tool’ Chandigarh, August 24 The new approach, which infact is the basic purpose of life insurance, say the experts would not only improve living standards in the country, but will also increase life insurance penetration manifold. “The very basic idea of life assurance is that even in case of some mishap, that is, death of the bread earner, the family is able to maintain its standard of living. Till now, life insurance is mainly either looked upon as a tax saving tool or as an investment, which should be secondary to the main aim of taking an insurance policy”, said Mr Maninder Sood, Branch Head, HDFC Standard Life Insurance which has recently launched operations in the region. According to official figures, LIC did more than 25 per cent of its business in the Chandigarh division in March ,2001, though there has been a decline in this percentage over the last year. LIC, at present has almost 80 products in the market of which seven to eight including term insurance, endowment policy, money back policy and annuities, capture major portion of the total business. These policies are the ones which are offering benefits like good returns, annual payment or tax saving, risk coverage, thus taking the back seat. When the purpose is to avail other benefits one remains grossly underinsured. “After having taken several policies, I thought I was over insured. But when I calculated, given the standard of living I am following, I realised that infact I am highly under insured”, said Mr Anuroop ‘Tony’ Singh CEO and MD of Max New York Life Insurance. It definitely would be difficult to change the outlook of the people regarding life insurance policies, say private insurance companies. “It might take some time, but gradually people will understand its importance”, said Mr Sood. Interestingly, even LIC is taking to this aspect of life insurance. “Now we are concentrating on presenting monthly reports of the business done rather than focussing merely on the annual results”, said an LIC official. This, he said, would be possible only if the company is able to convince its customers of the primary benefits of life insurance as a risk covering tool. “It would not happen immediately because today benefits like high returns on insurance policies are still dominant, however, with due efforts companies will be able to change the trend in the economy”, says Mr B.K. Sharma of UGCE IIT, an IRDA recognised insurance training institute. In order to generate awareness in the masses, the private insurance companies and insurance training institutes will organise seminars, road shows etc. These companies are also offering riders alongwith the main policies. “The response from the high and upper middle income group has been encouraging, however, the major target would be middle class and lower income segments which are still to be covered”, said Mr Sood of HDFC Standard Life Insurance. |
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Investors allege fund diversion by Ritesh Ind Ludhiana August 24 Though according to the management, the company is doing well, it admitted, it had not paid any dividend to investors since the time of its public issue in 1994. Investors allege that the company has diverted their money in the hosiery business and is annually making exports worth Rs 20-25 crore. Mr Rajiv Arora, son of Mr Pran Arora, Managing Director of the company, the investors alleged, has shifted his business to the USA with their money. It is learnt that the company has not paid any dividends to 33,722 investors who had invested Rs 5.85 crore by purchasing 39 lakh shares at a premium of Rs 5 in 1994. The company, promoted by Mr Pran Arora, his sons Rajiv Arora and Sanjeev Arora, had informed the investors at the time of investment that they had set up a milk processing plant at Palwal in Haryana by investing Rs 12.30 crore. The management claimed that the project promoters were themselves investing Rs 3.08 crore, and had raised a secured loan of Rs 8.93 crore, unsecured loan of 9.5 lakh and were availing subsidy worth Rs 15 lakh from the government. However, the company shifted its plant to Ludhiana without even bothering to inform the investors. Interestingly, in 1992 the company had offered promoters shares worth Rs 4.40 crore to the public with a lock-in period of three years. The investors were issued letters in 1995 informing them of an increase in the lock-in period to five years. Mr Tarun Verma and his family, who had purchased 500 shares at a rate of Rs 10, said, “ The price of the company’s share in 1995 was Rs 17-18 but we were not allowed to offload them in the market. After five years time period, there were no takers for these shares in the market. Lack of transparency, dubious accounts and diversion of investors’ funds have resulted in a loss of money worth crores of rupees to us.” The company has allegedly failed to repay its loans to the banks also. Sources in the LSE revealed that the company was making good profits through the exports of hosiery goods. However, it has not paid even the listing fee to the LSE worth Rs 42,000 for the past three years hoping that its trading would be suspended, relieving it of any responsibility towards investors. The officials said since the company had opened its registered office in New Delhi, so the wind up issue could not be taken up by the LSE. Mr Pran Arora, MD of the company, admitted to The Tribune over the phone that the company had failed to pay any dividend over the past six years. He said, “ The condition of the company is good and is expected to improve further in the coming days. We would certainly pay dividend to the investors in the next one or two years. The lock-in period was increased only under the SEBI rules. We have not committed any fraud with the investors.” Asked if they had ever supplied balance-sheets or information regarding an AGM to the investors, whether the company has been issued a show-cause notice by the stock exchange for its failure to meet the compliance conditions, and how much money it owed to the banks, Mr Arora and his son Mr Rajiv Arora, who is also a Director of the company, declined to make any comment. Mr Rajiv Arora said: “I will ask some official of the company to answer these questions,” and put the phone down. However, no official answered these questions despite repeated attempts. The investors have urged the stock exchange and SEBI to take action against the company for the violation of the company Act and the listing rules at the stock exchange. They have demanded an investigation into the dubious dealings of the company and diversion of funds. |
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PM, states to discuss co-op credit system Chandigarh, August 24 The meeting will be presided over by the Prime Minister, Mr Atal Behari Vajpayee. The Punjab Chief Minister, Mr Parkash Singh Badal, accompanied by senior officers of the Punjab Cooperative Department have already left for the national capital to attend the meeting. The main agenda of the meeting is reforms in the cooperative credit in the light of the recommendations of the Task Force on cooperative credit system. Recommendations include implementation of the essential features of the Model Act proposed by the Chowdhary Brahm Perkash Committee, Avoiding duality of control systems over cooperatives and the redefining the role of state governments as also of the RBI, Nabard in respect of Cooperative credit structure, Development of cooperatives as member driver business enterprise, professionalism in the cooperative banks, costs, margins, and interest rates etc. Informed sources said in most of the states especially predominantly agriculture states, the cooperative financial institutions especially banks are facing problems on the financial front. There are consensus among all the states to urge the Union Government to provide Rs 6000 crore to the states to clean up the balance sheets of such institutions. Punjab’s demand would be of Rs 200 crore. The state government’s have prepared their case to put such a demand on the basis of the financial help of Rs 14,000 crore provided by the Union Government’s to certain commercial banks which had almost collapsed due to multi crore financial frauds and mismanagement. Sources said that if the Union Finance Ministry could help the commercial banks to come out of red, It would have to pay money to cooperative banks, which were a life line of the Indian agriculture economy. The state government would also press the Union Government to reduce the interest rate of loans meant for Rural Infrastructure Development Fund from existing 10.5 per cent to 4 per cent. These funds are provided by the Nabard. The state governments also wanted that the RBI and Nabard should in consultations with the state governments concerned evolve a joint control and regulation system for cohesive functioning of the cooperative institutions in the state ensuring minimum interference of the state Governments in their functioning. However, many states including Punjab may get the stick from the Union Government for not implementing the New Cooperative Act based on the Model Act prepared by Chowdhary Committee. |
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Bharti to come out with public issue Ahmedabad, August 24 Talking to UNI here yesterday after attending the convocation of the Entrepreneurship Development Institute of India (EDII), Chairman and Group Managing Director of the company, Sunil Mittal said, “we are in the final stages of going public’’. He said they would file their application of public issue with SEBI next month. After the application with SEBI, it would take another three to four months, as per the SEBI procedure, for going public, he said. They were in the final stage of valuation of their total assets so that they could decide how much volume could be kept for the public offer. However, he said the public offer would be around $ 250 million. About launching their mobile phone operation in the Gujarat circle, Mr Mittal said, they would launch it by March 2002. He said Bharti would invest about Rs 200 crore in networking for the first phase and added that the CEO for Gujarat operations had already been appointed. Recently in New Delhi, Bharti Enterprises has unveiled a game-plan for providing world-class pan-india mobile services to 700 million people across 15 states in the country after successful bids for the fourth cellular licence in Mumbai, Maharashtra, Gujarat, Haryana, UP (West), Madhya Pradesh, Kerala and Tamil Nadu. According to Mr Mittal, “the strategic roadmap and restructuring in mobility is designed to make Bharti a pan-India mobile leader. A larger business footprint not only provides a bigger geographical market but enables every business leader to plan for greater synergies and economies of scale.’’
UNI |
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Income tax employees
launch agitation Chandigarh, August 24 The employees under the joint banner of the Income Tax Gazetted Services Federation (ITFSF) and the Income Tax Employees Federation (ITEF) on August 18 launched an unannounced all India non-cooperation agitation against the cadre restructuring by the Finance Ministry, an official spokesman of the the Northwest Region Federation of the All-India body told The Tribune here today. He said that the Federation is not allowing transfer of records required after the restructuring of the department and not cooperating in computerisation process, an inescapable IT compliance measure, leaving the promoted officers with no records to work on investigations. The spokesman, however, said that the Federation has not hampered the work in computer training, issuance of Permanent Account Number (PAN) and challan processing. He said after promotions of the Chief Income Tax Commissioners, Income Tax Commissioners, Deputy Income Tax Commissioners and Joint Income Tax Commissioners, the available officers in junior ranks against sanctioned strength have come down drastically affecting effectiveness of the department. Giving an example, the spokesman said that the Northwest Region against a sanctioned strength of 135 officers only has 45 people affecting investigations against the “big fish.” He said the ill-conceived restructuring programme was launched in last August with an aim to ensure better control, close monitoring and promotion avenues to officials in the department, but leaving out Income Tax Officers (ITO’s), Deputy Income Tax Commissioners and Assistant Income Tax Commissioners from the restructuring process has resulted in the reverse. He claimed that the e-filing of returns and much talked about computerisation bringing comfort to the assesses would only remain a tall claim and it would have a bearing on the next budget if justice was not given to the employees at the earliest. |
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Punjab Govt to sell securities by auction Chandigarh, August 24 A spokesman of the Finance Department said these securities would be issued for a minimum nominal amount of Rs 1,000 and multiples of Rs 1,000 thereafter. The auction would be conducted by the RBI at Mumbai Office (Fort) on August 28. The spokesman pointed out that the interested persons may submit bids in the prescribed from obtainable from the Chief General Manager, RBI, Mumbai Office, Fort. Investors can submit more than one bid at different rates of yield but a separate application should be submitted for each bid. The aggregate amount of bids submitted by a person should not exceed the notified amount. The result of auction would be displayed at the offices of RBI, Mumbai and Chandigarh, on August 28. |
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Coop Bank releases
1069-cr loan to farmers Chandigarh, August 24 Disclosing this here today, a spokesman for the bank said 2.79 lakh Kisan Credit Cards would be issued to the farmers of the state this year. He said the bank would advance loans worth Rs 3,500 crore to the farmers, rural artisans, entrepreneurs and farm labourers this year as against Rs 3,078.28 crore advanced by it during the past financial year. He said that keeping in view the increased burden on the parents to impart advanced vocational education to their children, the bank had decided to enhance the loan for this purpose from Rs 50,000 to Rs 1,00,000. |
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NFL to revamp Panipat, Bathinda plants New Delhi, August 24 The country’s second largest producer of nitrogenous fertiliser said it was awaiting the announcement of the fertiliser policy by the government to go ahead with its plan for the revamp of the two Northern India plants. A voluntary retirement scheme for right sizing the organisation is also on the anvil, it said. The NFL celebrated its annual day last evening with Union Minister of Chemicals and Fertilisers, Mr S.S. Dhindsa, being the chief guest. |
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Ashok Kumar ACC, Ambuja shares to rise Over the last two weeks, we looked in alternatively at two sets of old economy and new economy stocks that caught my wife’s attention. This week round, it’s the turn of a steel manufacturing and another cement manufacturing company to take the bow. Tata Iron and Steel (TISCO), has emerged as a focused and cost effective steel producer in the country. To this end, it has hived off its cement plant for Rs 550 crore to Lafarge and has also sold its stake in Tata Timken to Timken. In order to concentrate on its core competence it has already pumped Rs 8,000 crore towards modernisation of its plant and is also downsizing its operations. In a conscious effort towards addition of value-added products in its portfolio, Tisco has recently implemented a 1.2 million tonnes per annum cold rolling mill complex at Jamshedpur. Furthermore, worldwide, the industry is improved realisation for the producers. With the global demand expected to touch 20 million tonnes by the end of 2001, Tisco appears well positioned to cash in on this trend. In fact, the company has already started witnessing an increase in the total exports earnings. Gujarat Ambuja Cement Limited (GACL) is one of the leading and most efficient producers of cement. GACL managed to produce 5.8 mm ton in F6/2000 from a capacity 5 mm ton on account of higher operational efficiency. During the year the company formed a strategic alliance with ACC with GACL buying out the promoters stake in the company. The year also witnessed the formation of Ambuja Cement India Ltd (ACIL). GACL is the lowest cost producer in the country helped by new plants, better quality of limestone and innovative energy management efforts. GACL is increasing cement capacity through Greenfield capacity creation and acquisitions. The company has entered into a strategic alliance with ACC, the largest cement manufacturer in the country. In this case the company has also managed to pre-empt competition. GACL has acquired DLF Cements (a Rajasthan based company), which will give it a very strong presence in Northern India. The company is also setting up two large cement capacities one each in Maharashtra and Andhra Pradesh with the second one being managed by Ambuja Cement India Ltd. The ACC deal coupled with the acquisition of DLF Cements has disturbed the company’s cash flow position. The company has emerged as one of the most efficient and fast growing cement companies during the last decade. GACL’s has 3 cement plants are located at Kodinar, Darlaghat in HP & Roopnagar in Punjab. GACL has five cement plants located at Gujarat, HP and Punjab with an installed capacity of nearly 5.5 mm ton. GACL enjoys as large distribution network of 11,500 outlets. The company’s cement sold under the Gujarat Ambuja brand name enjoys good brand equity and a price premium. Ambuja continued to be the largest selling brand in Gujarat and Mumbai. The company continued to maintain lead on the export front clocking with exports in volume terms touching 0.625 mm ton as compared to 0.504 mm ton clocked during the previous fiscal. GACL is the lowest cost producer in the country helped by new plants, better quality of limestone and innovative energy management efforts. It has been able to post profits despite the low realisations in Gujarat primarily on account of excellent operating parameters. Its predominantly retail presence in Mumbai, Gujarat and Punjab gives the company an edge over its peers in terms of pricing power. GACL is increasing its cement capacity through Greenfield capacity creation and acquisitions. The company has entered into a strategic alliance with ACC, the largest cement manufacturer in the country. With cement prices beginning to look up, Gujarat Ambuja Cement, which is a fundamentally sound company, could well witness an enhancement in its bottomline. Are these two stocks ready for the take? Well, your guess is as good as mine.  |
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