B U S I N E S S

Investment Commission gets Cabinet approval
New Delhi, October 27
The Centre today cleared the setting up of an Investment Commission to specifically address issues pertaining to foreign investment. Finance Minister P Chidambaram told newspersons after the meeting of the Cabinet Committee on Economic Affairs that the Commission would function under the Ministry of Finance.

Himachal to lease out profit-making hotels too
Shimla, October 27
The state government is all set to go ahead with the disinvestment in the Himachal Pradesh Tourism Development Corporation not only to lease out the loss making units but also to lease out the profit making units so as to increase their earning potential.

Rahman strikes a discordant note for SBI
Chennai, October 27
The State Bank of India has lost a consumer case to famous music director Mr. A.R. Rahman and has been directed to pay a compensation of Rs. 50,000 by a city-based Consumer Redressal Forum in a complaint of deficiency of service.

Bitter pill for Dr Reddy’s as Nordisk cancels deal
Mumbai, October 27
Dr. Reddy’s Laboratories Ltd. suffered another setback in drug research on Wednesday as Novo Nordisk A/S terminated further development of an oral diabetes treatment licensed from the Indian firm.

Valve makers await inspecting official
Jalandhar, October 27
The alleged failure of the state government to appoint a new Director Inspector of Boilers for past about one month has adversely affected nearly 25 high pressure valve manufacturing factories.

A dog's life?

Model Lady Isabella Hervey kisses her dog Cleo, wearing diamonds worth £ 15,000 ($ 27,000) at a charity fashion show in aid of dog welfare in London on Wednesday. The diamonds are a part of a stunning range of dog accessories to go on sale at Harrods, one of London's top department stores. — AP/PTI

Stop further release, Bisleri makers told
Mumbai, October 27
Maharashtra Food and Drug Administration has directed Parle Exports, the manufacturers of Bisleri bottled water, not to release the product in the market till further orders. The company has failed to conduct required microbiological tests as a quarantine procedure as per Bureau of Indian Standards’ (BIS) norms, FDA Commissioner A Ramakrishnan told reporters here today.

RBI plans to rope in Sebi, IRDA
New Delhi, October 27
The Reserve Bank of India will soon rope in other regulators — Sebi and IRDA — to set up a Working Group in a bid to strengthen the regulatory mechanism for preventing the potential “conflict of interest” in the financial sector.

CORPORATE RESULTS

Maruti net zooms 48 pc
New Delhi, October 27
Maruti Udyog, India’s biggest carmaker, has posted an impressive 48 per cent rise in net profit for the second quarter this fiscal as vehicle sales drove up on the back of low interest rates.

• GRAPHICS : INDIA'S TRADE WITH MYANMAR

• PERFORMANCE OF INFRASTRUCTURE INDUSTRIES

Investment Commission gets Cabinet approval
Tribune News Service

New Delhi, October 27
The Centre today cleared the setting up of an Investment Commission to specifically address issues pertaining to foreign investment.

Finance Minister P Chidambaram told newspersons after the meeting of the Cabinet Committee on Economic Affairs (CCEA) that the Commission would function under the Ministry of Finance.

The Commission will have a broad authority by the government to engage, discuss with and invite domestic and foreign businesses to invest in the country.

Mr Chidambaram said the chairman of the Commission would be decided later.

The Cabinet also approved a voluntary retirement scheme (VRS) to the employees of the India Investment Centre (IIC), which would pave the way for the closure of the body.

The IIC was set up in 1960 for promotion of private investment in India.

The total expenditure on the payment of VRS package to 74 officials of IIC is estimated at Rs 7 crore, an official spokesperson said.

The spokesperson said the action to dissolve IIC may be taken after the expiry of three months.

The implementation of VRS package and subsequent closure of IIC will ensure pay-back to the government in about three years, the spokesperson said.

According to the terms of the scheme, the VRS scheme may be kept open for three months with effect from the date of the offer to be issued by IIC.

Requisite Budget provision to meet the expenditure both on account of VRS as well as pension and family pension liabilities will be included in the revised estimates for 2004-05.

The VRS scheme applicable to surplus employees of Central government may be offered to the IIC employees, the spokesperson said.

The IIC, in addition to the head office at New Delhi, had also set up offices in New York, London, Abu Dhabi, Frankfurt, Singapore and Tokyo. 

Himachal to lease out profit-making hotels too
Pratibha Chauhan
Tribune News Service

Shimla, October 27
The state government is all set to go ahead with the disinvestment in the Himachal Pradesh Tourism Development Corporation (HPTDC) not only to lease out the loss making units but also to lease out the profit making units so as to increase their earning potential.

As per the plan chalked out to go ahead with the disinvestment plans, the three big properties of Palace Hotel at Chail, Naldehra Hotel and the Ashiana restaurant on the Ridge here, would be leased out in the first lot. Even though all these three properties of the HPTDC have been churning out profit but it is being felt that their real profit making potential had not been exploited to the hilt and there is a scope for more.

It is reliably learnt that international tenders would be floated to get the biggest brand names in the hotel and tourism industry to take them over. The big chain of hotels, which could be considered, include Maurya Sheraton, Continental Group and Mariton, so that these properties can generate good earnings for the government.

The Tourism minister, Mr G.S. Bali, confirmed that there were plans to give these three prime properties on lease so that the government could get much more than what is presently being earned. “Though we are all set to go ahead with our disinvestments plans but in case the HPTDC staff assures us they would double the profits at these places within a stipulated time, we could hold back our plans,” he said.

At present the Ashiana restaurant on the Ridge, despite its prime location has been able to generate an annual profit of Rs 4 lakh, merely. “We feel that the restaurant must at least generate up to Rs 20 lakh profit or else the government stands to gain better if it is leased out to a private party.

“The officials of the HPTDC department are in touch with the Town and Country Planning department to discuss the feasibility of constructing a revolving restaurant at this prime location,” Mr Bali disclosed. Being in the heritage zone, where there is a complete ban on constructions, there might be technical problems in the coming up of the revolving restaurant.

Mr Bali, said the Palace Hotel, Chail, was registering an annual profit of nearly Rs 50 lakh whereas it had the potential to generate Rs 1.50 crore for the government.

HPTDC hotels, which have been registering losses include those located at Jogindernagar, Rewalsar and Mandi in Mandi district. The hotel at Rohru and Rampur, have also been running into loss, as there is very little tourist rush on that circuit.

Interestingly the units located in the tribal belts of Kinnaur and Lahaul-Spiti at Sangla, Keylong are doing a decent business.

Rahman strikes a discordant note for SBI
Arup Chanda
Tribune News Service

Chennai, October 27
The State Bank of India (SBI) has lost a consumer case to famous music director Mr. A.R. Rahman and has been directed to pay a compensation of Rs. 50,000 by a city-based Consumer Redressal Forum in a complaint of deficiency of service.

Mr Rahman, who owns Panchathan Record Inn Private Limited, had moved the forum after the bank charged him a huge amount as excess interest for a loan taken by him by mortgaging his property.

He said he had obtained a loan of Rs 1.75 crore from the SBI in July 1996 by mortgaging his property to purchase musical instruments and it was to be repaid in 20 quarterly instalments starting from December 1996.

Mr Rahman said the rate of interest to be charged was 2.5 per cent over or below the SBI Advanced Rate (SBAR) subject to a maximum of 19 per cent.

In June 2001 he paid the balance of Rs 35 lakh, thereby foreclosing the loan account and requested the bank to return the title deeds of his mortgaged properties.

But the SBI demanded Rs 23.11 lakh towards interest to return the documents though the bank statement did not show any such debits.

Mr Rahman was told by the bank that it had inadvertently charged interest at a lower rate and he was to pay interest at the rate of 19.75 per cent per year retrospectively from the date of availing the loan.

The music director moved the consumer court alleging unfair trade practice and prayed the forum to direct the SBI to pay a compensation of Rs 1 lakh for mental agony and to return the mortgaged property documents.

The SBI admitted that the interest was erroneously charged at a lesser rate on the basis of the then prevailing SBAR without taking into consideration the fact that such a rate should be subject to a minimum rate of 19 per cent.

The bank contended that instead of paying the interest, Mr Rahman wanted to take advantage of the error committed in interest calculation and demanded the documents of title deeds.

The forum observed that the alleged mistake had come to the notice of Mr Rahman only when he wanted to foreclose the account, paid the balance and sought return of the title deeds.

It ruled that the claim of Rs 23.11 lakh was not a small amount and if such an amount was claimed suddenly that too retrospectively, it would have definitely caused mental agony and financial strain to the complainant.

The consumer court held that there was negligence on the part of the bank from the beginning and they were liable for deficiency in service and hence awarded Rs. 50,000 as compensation to Mr. Rahman, which has to be paid within a month.

Bitter pill for Dr Reddy’s as Nordisk cancels deal

Mumbai, October 27
Dr. Reddy’s Laboratories Ltd. suffered another setback in drug research on Wednesday as Novo Nordisk A/S terminated further development of an oral diabetes treatment licensed from the Indian firm.

The news, the second time the Danish company has ended development of a Dr. Reddy’s treatment, came a day after the Indian company reported a 44 per cent drop in second-quarter profits.

Novo Nordisk said it took the decision after pre-clinical results suggested insufficient competitive advantages over similar products in the market. Dr. Reddy’s licensed the molecule Balaglitazone, an insulin sensitiser, to Novo Nordisk in 1997.

“We are disappointed that the development of Balaglitazone had to be discontinued by Novo Nordisk,” Uday Saxena, chief scientific officer of Dr. Reddy’s, said in a statement.

Switzerland’s Novartis AG also discontinued the development of a diabetes drug licensed from Dr. Reddy’s.

Dr Reddy’s Laboratories has posted a 63 per cent decline in net profit at Rs 38.93 crore for the quarter ended September 30, 2004 as compared to Rs 104.51 crore in the year-ago period. — Reuters

Valve makers await inspecting official
Tribune News Service

Jalandhar, October 27
The alleged failure of the state government to appoint a new Director Inspector of Boilers (DIB) for past about one month has adversely affected nearly 25 high pressure valve manufacturing factories. These factories are not able to send their products to oil refineries and other heavy industrial units for lack of mandatory inspection of manufactured valves.

The government, it was learnt, has failed to appoint a new DIB based at Jalandhar after the retirement of the former DIB more than a month ago. Since no official, other than the DIB, is authorised to subject high-pressure valves to inspection and subsequent stamping, the supply of valves, worth crores, has virtually come to a grinding halt.

According to an estimate, big valve-manufacturing units of Jalandhar produce high pressure valves worth Rs 12-15 crore a year. Not only are the valves used in the oil refineries of the country but they are also used in boilers at various factories.

“Currently no official is available in Jalandhar for inspection and stamping of valves. And the result is that supply of valves to refineries and other industries has stopped. My own factory had to send valves to oil refinery at Kochi, but, I could not do that in the absence of mandatory inspection,” says Ms. Poornima Berry, the Chairman of the CII (Valve Division) and Managing Director of a leading valve manufacturing unit of Jalandhar.

On the other hand, though no senior officer of the Department of Industries was available, official sources, say efforts are being made to appoint a DIB at Jalandhar.

Stop further release, Bisleri makers told

Mumbai, October 27
Maharashtra Food and Drug Administration (FDA) has directed Parle Exports, the manufacturers of Bisleri bottled water, not to release the product in the market till further orders.

The company has failed to conduct required microbiological tests as a quarantine procedure as per Bureau of Indian Standards’ (BIS) norms, FDA Commissioner A Ramakrishnan told reporters here today.

Simultaneously, the FDA Commissioner has also directed the local licensing authority, Brihanmumbai Municipal Corporation (BMC), not to allow the production and sale of the product until the company fulfils the BIS norms.

The company has violated the mandatory procedure laid down by the BIS, he said.

Although the bottled water company managed to re-acquire the permission from the BIS to label its product with the BIS mark a few hours after the FDA had ordered two of its units to suspend production on October 25, the FDA Commissioner said “we have written a letter to the BMC to suspend the production of bottled water until the quarantine norms are met with.” — PTI

RBI plans to rope in Sebi, IRDA

New Delhi, October 27
The Reserve Bank of India (RBI) will soon rope in other regulators — Sebi and IRDA — to set up a Working Group in a bid to strengthen the regulatory mechanism for preventing the potential “conflict of interest” in the financial sector.

The group, which would be asked to submit a report within four months, is mainly aimed at evolving methods to safeguard the interests of investors and stakeholders.

Announcing the move in its Busy Season Credit and Monetary Policy, RBI Governor Y.V. Reddy said the group would identify the sources and nature of “potential conflict of interest” and international practices to mitigate any problem.

The group, to be set up in consultation with chairmen of Securities and Exchange Board of India (Sebi) and Insurance Regulatory and Development Authority (IRDA), would also study the existing mechanism in the country and make recommendations to avoid any conflict. — PTI

BRIEFLY

THDC CMD
Chandigarh, October 27
Mr R.K. Sharma has taken over as Chairman & Managing Director of the Tehri Hydro Development Corporation (THDC), a PSU under the administrative control of Ministry of Power. Before joining the THDC, he was Director (Technical) in the NHPC. — TNS

Conference
Jaito, October 27
Punjab cotton traders and cotton factory owners will hold a conference in Bathinda on October 31. The Northern India Cotton Association president, Mr Rakesh Rakhi, today said the conference would be held at 1000 hrs in which Income Tax Commissioner (Appeals), Mr A.C. Tejpaul, would participate. — UNI

SAL Steel
New Delhi, October 27
SAL Steel today said it would hit the capital market on November 1 with a public issue of 4.2 crore equity shares for a backward integration project to manufacture sponge iron, ferro alloys and set up rolling mills. The entire issue will be made through a book-building process and the price-band has been fixed between Rs 12-14 per share with a face value of Rs 10, SAL Steel Chairman, Mr Rajendra Shah, said. — UNI

Bank of Baroda
Mumbai, October 27
Hit by fall in the income from sale of investments, Bank of Baroda (BoB) has posted a 17.82 per cent decline in its second quarter net profit at Rs 213.31 crore as against Rs 259.56 crore in the same period previous year. The total income for the reporting quarter was also down by 6.91 per cent to Rs 1,907.61 crore as against Rs 2,049.31 crore in July-September 2003, the state-owned bank said in a release today. — PTI

Dixy Chicken
New Delhi, October 27
After KFC and McDonald's of the USA, the leading London-based fast food multinational Dixy Chicken is making forays in the Indian market and will open its first two outlets here by early next year. "We are investing Rs 3 crore each to open an outlet in Mumbai and Delhi shortly and intend to sign-up franchisees to have 30 outlets within two years", Franchise Director, Dixy Chicken, Mr Kamran Amjad, said. — PTI

SBI PO test
Chandigarh, October 27
The State Bank of India has postponed the written test for recruitment of Probationary Officers, which was to be held on October 31. The new date for the written test will be announced shortly. — TNS