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Tuesday,
August 6, 2002, Chandigarh, India  
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SEs helpless against defaulting firms
World Bank best bet for India: Vasudev |
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Enron’s thirst for growth brought it down Financial crisis in PSEB deepens HMT bags
Rs 12 crore order
Kundli industrial zone records 16 cr exports
Hyundai sales jump
Wipro Infotech in pact with Interwoven
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SEs helpless against defaulting firms Chandigarh, August 5 Talking to The Tribune, he disclosed that the BSE management and other stock exchanges felt helpless to take action against the defaulting companies. He was in the city yesterday to attend an investors’ awareness programme. He said the investors’ interests could not be properly safeguarded by suspending the trading, as in that case, the exchanges would have no check over them. Though some good companies were sensitive about this stringent action, but there were hundreds of companies in the country, which had simply vanished after collecting crores from the market. Mr Reddy claimed that BSE had suspended more than 600 companies over the past one year, out of about 5,700 companies registered with the exchange. In May, 2002 alone, 85 companies were suspended, which had failed to submit quarterly results for the last quarters as required under clause 41 of the listing agreement. In June 2002, 25 companies were further suspended by the management. He said these companies included Mukerian Papers Ltd, Rajinder Steel, Vatsa Corporation, Panchmehal Cement, Montari Leathers, Penta four Products, Ace Laborotories, Gujarat Fun N Water Park Ltd, Hindustan Development Corporation and Pal Peugot Ltd. The other companies included Sunstar Software System Ltd, Mesco Pharmaceutical, Century Tubes, Amrut Industries, Eastern Mining & Allied Ltd, J.F. Laborotories, Manav Yarn Products Ltd, Prakash Solvent Extractors and Alka Diamond Industries. He said since these companies failed to redress the complaints of thousands of investors, he said, the exchange was forced to take such an
action. Though exchange would also have to suffer losses amounting to lakhs of rupees in term of listing fee, but these companies could not be allowed to function at the market. Mr H.S. Sidhu, GM, Ludhiana Stock Exchange, also admitted that out of about 450 companies listed with LSE, about 70 companies had been suspended for non-compliance with the conditions of the listing agreement. They had cheated about 50,000 companies in the region by collecting about Rs 100 crore from them, however, neither they had paid any dividend to them nor any information about company performance. Some of them had simply vanished after collecting money. Mr Reddy suggested that the investors should approach the Department of Company Affairs, which had the powers to prosecute the directors of the companies in case of serious complaints under the Company Act. Moreover, the properties of these companies could be attached by the department. However, there was a need, he said, for the intervention of the Parliament to empower the exchanges to take action against the defaulting companies. He added that the investors awareness programme was also aimed at create awareness about the dubious
companies. The BSE has also launched online trade confirmation system, to make the system more transparent. |
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BSE eyeing merger with DSE, CSE New Delhi, August 5 “We had several rounds of discussions with Delhi Stock Exchange officials about the merger. We are talking to Calcutta Stock Exchange. Madras Stock Exchange has also given a presentation to us,” official sources told PTI. DSE President and Vice-President last week stepped down from their posts to facilitate the process of corporatisation of the Delhi bourse, in line with the SEBI directive. The BSE would undertake a due diligence
exercise shortly, sources said. PTI |
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India’s share in world rebounds New Delhi, August 5 India’s share in the world trade has climbed up to 0.7 per cent in 2001 from 0.4 per cent in 1992. “Our policies in the earlier years, till the last decade were inward looking. Self sufficiency and import substitution were emphasised but not exports. Small wonder, therefore, that by 1992 the share in world exports dwindled to a mere 0.4 per cent”, Commerce Secretary Dipak Chatterjee said in his convocation address at the Indian Institute of Foreign Trade here today. The Commerce
Secretary said to achieve one per cent share of the global market by 2006, the Commerce Ministry has unveiled a medium term export strategy.
UNI |
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Spinfed or ‘Spindead’? Chandigarh, August 4 The official presentation mentions, ‘’lack of high class professionals’’, as one of he reasons for losses in the spinning mills. There is, perhaps, also ‘’lack of vision’’, as is evident from the presentation made by the bureaucrats concerned to the Cabinet Committee on Co-operation on July 30, suggesting ‘’revival’’ and seeking budgetary support, equity capital and term loan, besides, money to pay back wages (since November 1, 2001) to 2,500 employees. Though these demands add up to nearly Rs 200 crore, Spinfed has demanded that the government give at least Rs 45 crore for resuscitating two mills. The demand was rightly rejected . The other listed reasons for losses include, high cotton yarn ratio, obsolescence and lack of up-gradation (Spinfed was set up in 1980 and mills came up thereafter), non- creation of buffer stocks (raw material) during cotton season and general recession in the textile industry since 1995-96. For ‘’revival’’ of the mills two suggestions are made, one that a financial package will come from the National Cooperative Development Corporation, and two, a techno-economic feasibility study by All-India Federation of Co-operative Spinning Mills, Mumbai. At present there are no liabilities on these seven spinning mills. These have been cleared through One Time Settlement. The Disinvestment Commission decision on these mills is ‘’wind up’’. Yet, the bureaucrats are keen on the ‘’revival’’ (expansion and modernization) of these mills. Why?
TNS |
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World Bank best bet for India: Vasudev Chandigarh, August 5 In an interview today, Mr Vasudev said, ‘’It is ironical that both Punjab and Kerala are rich states with the highest per capita incomes, while the two governments are facing major financial problems. There is a large gap, a mis-match, between expenditure and resources’’. Does it mean that the states (people) are rich and governments are poor? he was asked. ‘’That is too blunt a statement’’. But his emphasis was on good governance in which the concept of “politics-driven economics” has to change to “economics-driven politics” for growth. On Punjab’s financial situation, he said the ‘’reforms’’ outlined in the budget are a ‘’bold initiative and at least shows the desire to take tough political decisions to correct the mis-match between revenue and expenditure’’. On Punjab projects pending with the World Bank and if ‘’free’’ power and irrigation water is an impediment, he replied, the World Bank’s concern was whether the client would make proper use of borrowed money, whether it had the capacity to repay and whether it had the capacity of debt servicing. ‘’The need is to work for an interface between the policy-makers and the civil society and identify barriers to growth. These barriers can be physical, intellectual or in terms of infrastructure’’. He gave one example that of “land market rigidity” in which a host of laws prohibited full exploitation for urbanisation, which he described as the ‘’future of production and an engine of growth’’. Mr Vasudev said, ‘’We have to dismantle old values, remove barriers and find access to trade. One will realise the enormity of the price being paid due to these barriers. Just quantify the cost to understand their impact. Removal of these barriers will unleash the growth potential. Therefore, the society must be made aware about these. And population is not a barrier to growth, as long as its pace does not outstrip services and supplies’’. To a question, he said, the World Bank assisted India to the tune of nearly $ 4 annually. The money was a mix of soft and commercial loans. As compared to other avenues of international funding, the World Bank remains the best, cheap bet for the country. The need in future is of funding for growth and development of infrastructure (railways and highways) and social sector: health care, education etc. In his new assignment, Mr Vasudev will
endeavour for more and better relationship between India and the Word Bank. When asked if it is true that developed countries dictated to developing countries by influencing the World Bank funding system, he said, ‘’Psyche has to change to understand the functioning of the World Bank. All 140-odd member-countries are shareholders in the World Bank. The voting power of these countries is determined by their share holding, which is based on the economic strength. Rather than blaming external factors the need is to look to the internal shortcomings’’. Mr Vasudev was in Chandigarh at the invitation of Centre for Research in Rural and Industrial Development Director, Rashpal Malhotra, who apprised him of the working of the institute and introduced the faculty. |
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Enron’s thirst for growth brought it down London, August 5 No wonder his colleagues called him Darth Vader. The same fervour for market forces guided Skilling and his predecessor, Kenneth Lay, throughout Enron’s short history. It explains the Texan energy trader’s early runaway successes as well as its spectacular failure. This is the central thesis of a new book from US-based consultants Peter Fusaro and Ross Miller, “What Went Wrong at Enron (Wiley)”. Many things went wrong, of course: Enron was brought to the brink by “a series of mis-steps, and just plain bad luck,” as the authors put it. Outright dishonesty also played a part. But Enron’s fundamental problem, Fusaro and Miller argue, was a unique, institutionalised thirst for spectacular growth, with top executives leading the charge. The company began life as Houston Natural Gas, a sleepy utility firm, but declared its overweaning ambition in 1985, when Lay, then its newly-installed boss, ordered a change of name. “Enron” was a conscious echo of the oil giant Exxon, and Lay was determined that his company would one day achieve the same prominence. He began by examining America’s 300,000 kilometre gas pipeline system. It’s a vast and complex network in which there are many thousands of different ways to transport gas across the country. Working out how to carry it in the cheapest way possible could unlock the door to boundless riches. With Ronald Reagan’s government deregulating the energy industry, Enron saw its chance and took it. Like any traditional energy firm, it already supplied the pipelines with natural gas from its wells. The company’s genius was to acquire a computer-aided knowledge of the network. And then use that to trade in the deregulated markets for transporting gas. Enron created an entirely new market, reaping massive rewards for its innovation, and the big financial institutions took notice. Wall Street’s appetite for derivative trading in the Nineties owed much to the gas futures, swaps and more complex instruments that Enron pioneered. Lay and Skilling, his right-hand man and later successor, were cast as heroes of deregulation and apostles of the free market. These titles are only half-deserved, since Enron certainly wasn’t above trying to rig markets against its competitors, as its well-documented lobbying of US lawmakers shows. But there is little doubt that both men held a ruthless sink-or-swim philosophy. Employees were made to feel it. Enron paid good wages and recruited from America’s top universities, but worked its staff hard. Applicants were put through a rigorous screening process and “had to demonstrate a strong sense of urgency in everything they did”. Twice a year, 15 per cent of the workforce was ritually sacked, to be replaced by new arrivals, and a further 30 per cent warned to improve. Employees were usually young, inexperienced and lacking in job options, since they lived in Houston, where Enron had few rivals. The company’s cut-throat working culture destroyed morale and internal cohesion but also made workers afraid to question their superiors, let alone blow the whistle on sharp practices. This, in the end, would be Enron’s undoing. Enron’s aim was to foster an entrepreneurial spirit among its staff. Sometimes it succeeded. On her own initiative, Louise Kitchen developed an internet-based trading service that within a year was handling $ 3 billion of transactions a day; it was snapped up by UBS Warburg after Enron crashed. Paradoxically, Enron’s hunger for continuing growth helps explain its business failures. Rivals were catching up in gas, and Enron became unfocused as it sought to apply its principle of market creation to electricity, pollution permits, water, bandwidth and any number of sunrise industries. Enron paid too much for Britain’s Wessex Water, and its hopes for broadband trading were dashed when it discovered there was no shortage of fibreoptic cable in the world. The company was losing money. Enron had always carried large debts. It had few hard assets, and could not afford to see its share price slip too low, because it had given many of its creditors stock in lieu of repayments. It also had to retain the appearance of creditworthiness at all times: if the likes of Standard & Poor’s were ever to remove its investment-grade credit rating it would be out of business.
The Guardian |
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Financial crisis in PSEB deepens Ludhiana, August 5 At the sametime, the massive cut on the industries is also causing loss to the industries as well as to the state exchequer as the industrial production has fallen by about 30 per cent. The steel prices have already touched alltime high because of the fall in the production of the same owing to heavy cut on the steel plants in the state. Meanwhile the enquiries made by The Tribune show today that the PSEB owes Rs 80 crore to the Coal India Ltd and Rs 160 crore to the Railways as arrears of the coal supply and Railway freight. The Punjab State Electricity Board is purchasing about 245 lakh units of power from the central sector plants daily to meet the power needs of the state. The daily consumption of power has been restricted to 1025 lakh units and it would have crossed 1200 lakh units if the cut had not been enforced. The PSEB has pressed upon the state electricity regulatory authority to give its verdict regarding the hike in the power tariff without any further delay to save the board from collapsing. Despite poor financial health of the state exchequer and the PSEB, the Punjab Government does not seem to be in a hurry to reimpose power tariff on tubewells. Enquiries further show that the Uttranchal State Electricity Board has started supplying fifteen lakh units of power to PSEB on payment following rains in that state. The PSEB is also getting 30 lakh units of power from J and K and HP on banking system. |
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HMT
bags Rs 12 crore order
Pinjore (Panchkula), August 5 The machines would be manufactured at the Hyderabad and Pinjore units of HMT, a spokesman of the HMT said here today. To finalise the order, a five-member high level Japanese delegation led by Mr S. Ikawa, Director, Toyota Motor Corporation accompanied by Mr B. Swaminathan, Director, Toyota Kirloskar Auto Parts Limited recently visited the Bangalore unit of HMT Machine Tools Limited. HMT Machine Tools Limited has emerged as a leading manufacturer of wide range of machines for general engineering, automobile, automobile ancillary and defence production sectors.
UNI |
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Kundli industrial zone records 16 cr exports Panchkula, August 5 Export oriented units (EOUs) set up here export items worth Rs 15. 96 crore during the past financial year. With at least 10 more units in this Export Processing Zone likely to begin production this year, the exports are likely to reach a new high. Sources in the HSIDC informed TNS that while seven of the units have already been set up in this zone, 37 units will be set up soon. Six units had already begun production last year, while another three had started exporting their products in 1999-2000. The zone has been created in 107 acres. As many as 146 plots have been allotted for setting up different industries. The sources said the Central Excise and Customs, the Cargo Centre, the state Industry Department and the Haryana Financial Corporation have already set up their offices to aid the EOUs. Also roads, drainage and culverts, street lighting, provision of water and power supply has been completed in this zone. Launched during the last decade, these zones were created for attracting foreign investment, earning foreign exchange and for employment generation. |
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Hyundai sales jump New Delhi, August 5 Hyundai India attributed the growth to good sales performance by its flagship car Santro. Sales of the premium small car jumped 52 per cent to 7,666 units during the review month from 5,041 units in July, 2001, and 2.9 per cent from 7,449 units in June, 2002. Exports were also up year-on-year to 352 cars from 30 cars in July last year. HMIL Executive Director (Marketing and Sales) B G Lee said the 1100cc Santro Zip Plus has received an overwhelming response and sales have increased steadily since its launch in March this year.
PTI |
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Grasim raises 50
cr Mumbai, August 5 |
bb
SBI camp XPS Cargo Essar Power Lakme |
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