New Delhi, September 3
Amid allegations by exporters that some banks "trapped" them into buying forex derivatives that led to huge losses, bankers today said investors were fully aware of the risks.

When asked about the charges by certain small and medium exporters that they were mis-sold the foreign exchange derivatives, bankers said on the condition of anonymity that exporters knowingly entered into foreign exchange derivative contracts to protect their earnings from exchange rate fluctuations, they added.

"We explained to participants the risk of entering into derivative contracts. In certain cases we have even recorded the conversation with them," a senior executive with a leading bank said.

The banker regretted that only 70-80 companies, who booked losses, have moved the court against the banks and are trying to make derivatives contract a bad word.

Even the number of court cases filed by the companies against banks dropped suddenly once the Enforcement Directorate started investigation into the alleged violation of Foreign Exchange Management Act (FEMA) on the basis of claims made by the petitioners.

Forex derivatives, a financial contract offered by lenders to hedge currency risk, have helped the companies in hedging currency risks and the exporting community have benefited from such contracts, the banker said. "In a globalised world we cannot do away with derivatives," the banker added.

Forex Derivatives Consumer Forum, set up to take up the cause of these exporters, members alleged that ICICI Bank, SBI, Axix Bank, HDFC Bank, ABN Amro and HSBC lured them into buying the forex derivatives.

The forum's representatives met finance minister P Chidambaram yesterday in this regard and appealed to him to intervene. They also met RBI Governor Y.V. Reddy in this regard. — PTI

Chandigarh, September 3
Life Insurance Corporation (LIC) is going to dig its teeth deeper in the realty sector in Punjab. After having acquired two prime commercial properties in Amritsar and Mohali, the country’s largest insurer is now aiming at acquiring a prime site of 3.6 acres in Ludhiana, which goes under the hammer later this week.

The strategic business unit of LIC, Estate Management division, will also be eyeing other properties in the state, which are being auctioned by the government agencies. The idea, according to officials, is to invest money in a high growth sector like real estate so that better returns can be offered to the policy holders, and the LIC can diversify its asset base. No wonder, the corporation has pumped in Rs 1,000 crore in acquiring properties through government auctions in the past two years.

It is learnt that almost 40 properties were acquired by the corporation in the past two years. These include properties in Delhi, Jaipur, Ghaziabad, Kanpur, Lucknow, Kolkata and Chennai, besides the two above mentioned properties in Punjab. Officials in the corporation say that they propose to bid for all government auctions of prime commercial properties in the region. The corporation proposes to develop these properties, lease them out and augment income through rentals. “We are also sprucing up our old properties (which are over 1,600 in number), so that these, too, can help us earn revenue through rentals,” said a senior official.

Senior officials in the Chandigarh division of LIC informed TNS that a real estate consultant has been hired, who has now prepared a report on how to best develop these properties. 

Bangalore, September 3
Leading US company, Harman International Industries Inc, has tied up with Indian IT major Wipro for capturing the “large emerging markets in Asia”. The two companies yesterday announced the launch of a joint engineering centre in India.

Harman International designs, manufactures and markets audio and infotainment products for use in automobiles. Their clientele also include common consumers and professionals. The company, which prides in having some 15 leading brands, has a strong presence in the Americas, Europe and in parts of Asia.

Dinesh C Paliwal, the US company’s Indian origin CEO, who had started his career as a supervisor in the Ballarpur Industries Ltd. unit at Yamunanagar in Haryana, rattled out names of some of the leading car brands, including Mercedes Benz and Toyota, that installed audio systems manufactured by Harman.

Paliwal and Suresh Vaswani, joint CEO, IT business, Wipro, said the new Harman India Development Centre would operate from Wipro’s facilities in Bangalore and Chennai.

They said the centre would become a platform for Harman for developing audio and infotainment products. Wipro, being the world’s largest independent provider of R&D services, would bring a wide range of capabilities to Harman, Paliwal said.

Services delivered from the centre would include both software development and development of related hardware engineering products. The US company would retain ownership of all intellectual property developed in the centre.

Paliwal and Vaswani insisted that the arrangement between the two companies did not amount to the US company getting some of its work “outsourced” by an Indian company.

They said the centre would focus on innovation and both companies would gain from the experience. “Wipro’s development and project management expertise will help Harman to become more competitive”, Paliwal said. He said the joint venture would also enable Harman “to better serve large emerging market opportunities in Asia”.

Ludhiana, September 3
A.P. Solvex Group of Industries is planning an investment of Rs 40 crore towards setting up a new rice bran extraction and refining unit in Jagraon, near here.

The company, that recorded a turnover of Rs 385 crore last year, is expecting this figure to cross Rs 500 crore this financial.

"We will increase the capacity of our existing plant in Dhuri and also set up a new plant, which would entail an investment of more than Rs 40 crore," said A.R. Sharma, chairman and managing director of the company, while talking to The Tribune here.

The company, which is a major supplier to brands like Saffola and Sundrop, is expecting to increase its market share in total rice bran extraction in Punjab to 25 per cent with the coming up of new facility.

Demand for rice bran oil is on the rise and many companies, including Dhara Vegetable Oil and Snacks, have expressed interest in procuring the oil from us, which has led to the decision of increasing capacities, he added.

Talking about the market for edible oils, Sharma said price rice of almost 30 per cent in the past one year had not affected demand much. "Demand for local oils is not price sensitive," said Sharma, who is also the former president of Solvent Extractors Association of India.

While prices are stable as of now, oil consumers may look forward to better days ahead and prices may reduce by "at least 10 per cent" in the coming two-three months.

Meanwhile, A.R.Sharma has been conferred National Award-2007 for research and development in the medium enterprises category, instituted by the ministry of micro, small and medium enterprises, Government of India. The award was presented to him by Prime Minister Manmohan Singh at a function held recently in Delhi.

BRIEFLY

LIC launches rural credit agents scheme
Chandigarh: Life Insurance Corporation (LIC) proposes to earn a premium revenue of Rs 1,000 crore from the Chandigarh region this year, with Rs 700 crore coming in from the rural sector. For this purpose, the public sector life insurer has launched a rural credit agents scheme. Raghupal Singh, senior divisional manager, LIC, said they proposed to hire 500 rural credit agents, who will b e paid a stipend for two years, over and above the commission, so that they can generate better business from the countryside. — TNS

PNB pays Rs 236-cr dividend
Chandigarh: Dr K.C.Chakrabarty, CMD, Punjab National Bank, on Wednesday presented a dividend cheque of Rs 236.91 crore to finance minister P. Chidambaram. This amount is annual dividend of 130 per cent paid to Government of India for the financial year 2007-08 as compared to Rs 182.24 crore paid during the 2006-07. — TNS