Monday, November 16, 1998
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B U S I N E S S | Monday, November 16, 1998 |
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Banks shying away from
Asian projects Punwire
to launch paging service in 150th city |
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Maruti asks vendors to
slash spare prices Hinduja
to foray into insurance sector |
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Banks shying away from Asian
projects CHANDIGARH, Nov 15 — The two-day third international business law conference of Lawasia concluded in Tokyo on November 10. About 300 delegates attended this conference. The 200 participants from Japan itself included foreign investment lawyers and senior level business executives from multinationals like Sony Corporation, Director IBM Japan and major Japanese Banks. Giving details of the conference the Chandigarh delegate, Mr Ranjit Malhotra, disclosed that 100 lawyers from different jurisdictions including the USA, UK and ASEAN countries were the foreign lawyers who took part in this conference. There were eight lawyers from India. The plenary session of the conference focussed on Japan’s Big Bang and the future of the Japanese legal system. The “Big Bang” in Japan started with the abolishment of a substantial part of the foreign exchange and control law on April 1, 1998. This was a symbolic event, resulting in a variety of economic impacts on Asian countries, and the beginning of a new age of open economic borders between countries in the Asia Pacific region. One of the major issues deliberated was the current issues in infrastructure development and finance in Asia. The Bank of Tokyo-Mitsubishi Limited spokesman concluded that because of renewed fright of currency devaluation, lack of coherent development policies and increased political risks, banks were less aggressive towards infrastructure projects in Asia these days. Some banks had stopped pursuing new transactions. One of the speakers from Australia analysed issues for business and the law arising out of electronic commerce. Electronic commerce is a 90’s phrase. It is a buzz word which will take us into the new millennium. The electronic, or on-line, commercial marketplace is a growth area. It is anticipated that the value of commerce conducted over the Internet will rise from $ 6 billion in 1997 to $ 300 billion in 2002. Coming to cyberspace taxation, after analysing the principles of international law, it transpired that two legal issues which are central to electronic commerce, have not been resolved by the courts as yet. This is with regard to jurisdiction of courts in relation to disputes arising in electronic commerce. The second issue is as to what law will govern online contracts? Renowned Japanese Attorney at Law and visiting Professor at both Harvard and Yale law schools Mr Yasuharu Nagashima pondered over corporate governance and structural changes in Asian society. The two speakers from India spoke on the economic, political, legal and juridical regime in the post explosion India. There were numerous queries in this regard on behalf of the foreign investors. While the Chandigarh delegate presented a paper on the law, practice and procedure relating to privatisation of power projects in India. Lawasia is a professional association of representative of Bar Councils, Law Associations, individual lawyers, law firms and corporations principally from the Asia Pacific Region. Lawasia’s primary objective since its inception in 1966 is to foster professional and business relations between lawyers, businesses and government representatives in the region. It also promotes the rule of law in a diverse range of political cultural, social and economic context throughout the region. Today, the association consists of 24 member countries and has representation from 70 different countries worldwide. This conference covered
the current economic and legal status of the Asia Pacific
region with a view to providing real solutions. The
conference was geared to prepare members of the
international fraternity for legal and economic
developments in the current environment. The conference
apart from stimulating discussions came to a close with
an invitation to the Lawasia 1999 biennial conference
scheduled to be held in Seoul in September, 1999. |
Maruti asks vendors to slash spare prices NEW DELHI, Nov 15 (PTI) — Maruti Udyog Ltd (MUL) has asked its vendors to slash component prices to help the car major maintain its profit margins in the wake of fierce competition in the passenger car segment. MUL is holding several meetings with its vendors to prevail upon them to reduce the spare parts prices so that its bottomline would be intact even if its 84 per cent market share would dwindle due to the flurry of new small cars. Company sources said here that MUL was approaching the vendors for a 20 per cent cut in the prices of components. A number of vendors had already agreed to slash the spare prices by 6 to 10 per cent without compromising on quality to help their largest buyer beat the rat race of small cars, the sources told PTI. The sources said the
cheaper availability of spares would not result in
slashing the prices of the vehicles. “We will never
go for a price reduction though now we get spares at a
cheaper rate,” they added. |
Udyog Rattan award for Milkfed
MD PATIALA, Nov 15 — Local Milkfed milk plant Managing Director S.S. Sandhu has been conferred by the institute of economic studies with the Udyog Rattan award in his capacity as Chief Executive of the plant for contribution in the field of industrial development. The award was conferred on Mr Sandhu by former Governor of Assam and Tamil Nadu Bhishma Narain Singh at a ceremony held at Delhi on November 12. The Patiala District Cooperative Milk Producers Union Limited was also conferred an excellence award for excellence in productivity, quality innovation and management. Mr Sandhu has been able to ensure a 26 per cent jump in milk procurement by the local plant during the year 1997-98. Talking to newsmen Mr,
Sandhu said the other credits achieved by the plant
included overall increase of 11.57 per cent in fluid milk
during 1997-98 and financial improvement of Rs 54.20 lakh
during the same period. |
Punwire to launch paging service in 150th city NEW DELHI, Nov 15 (PTI) — Largest paging network, Punwire, will launch its service in Dewas, Madhya Pradesh, thereby taking its reach to 150 cities in the country, a senior company official said here today. “Dewas will come under our service network on November 17” Vice Chairman and Managing Director of Punwire group, Gurpal Singh told PTI in an interview. Punwire, launched its paging service “Page Me” in January, 1997 and has extended its network in 12 states including Uttar Pradesh, Maharashtra and Punjab. “A pager is a low cost and ideal mode of communication for enhancing our social and business interactions” Singh said. Punwire was incorporated as a wholly owned subsidiary of the Punjab Industrial Development Corporation (PSIDC) and subsequently, PSIDC divested 58.21 per cent of its holding to the public and financial institutions. Punwire group, predominantly into telecom sector, has two companies, Punwire Paging Services Limited (PPSL) and Punwire Mobile Communication Ltd (PMCL) providing paging service in the country. PPSL, a joint venture between Punwire and Telia of Sweden provides services in Punjab, Haryana and Himachal Pradesh while PMCL, a 100 per cent Punwire owned company covers rest of nine states. “Besides in English,
the company has also started providing services in Hindi
and regional languages like Gujarati, Malayalam and
Tamil. Telugu and Kannada will soon be added” Singh
added.
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Hinduja to foray into insurance sector NEW DELHI, Nov 15 (PTI) — The UK based Hinduja group plans to venture into the insurance sector and has identified an Indian partner, group Chairman SP Hinduja has said. “Hindujas have decided to enter the insurance sector through one of its group company Indusind, once the sector is privatised,” Hinduja told PTI in an interview. However, he declined to reveal the name of domestic partner saying “we have identified a local partner but at the moment the group is not ready to disclose details.” He said the group will make its foray into insurance once the policy guidelines are announced by the government relating to issues like foreign equity and NRI participation. The group, which has a turnover of Rs 3,200 crore from its Indian operations has diverisfied into banking, finance, automobiles, pharmaceuticals, media and telecom sectors. Hinduja group companies operating in India include — Ashok Leyland which manufacturers trucks and buses, Indusind Bank, Astra IDL in pharmaceuticals, in TV and Hinduja finance. “The group through its bank and finance company will enter into the sector depending on the guidelines,” he said. When asked on the structure in which the group will enter into the sector, he said both Hinduja and IndusInd are separate entities and structure will be on the policy guidelines of the government. On the NRI response to the opening up of insurance sector, Hinduja said “NRIs all over the world are waiting for the sector to be opened”. He said with the opening up of the sector there will be huge inflow of NRI investment which will help India to mobilise large funds for the infrastructure sector. “The insurance sector
will provide long term funds for infrastructure,” he
added. |
Videocon Intl I have sent my bonds to Videocon International Ltd for redemption in January, 1998 with folio No 00001210, Distinctive Nos 0005518901, to 0005519000 0005518601 to 0005518700 certificate No are 000055187 and 000055190. The company has not sent me the redemption warrants till now despite many reminders. Usha
Rani II I have 100 bonds of Videocon International Limited. The bonds were due for redemption in February 1998 after five years. No response received inspite of several requests. Redemption is still awaited. The Folio No is S000287. Subash
Rani Singla Bank of India I had sent 200 shares of Bank of India having distinctive No 529147901-48000 and 529148001-48100 folio No 456364 on 10-6-98 for transferring the same in my favour. Though the statutory time limit of two months has already elapsed, I am still awaiting my shares. Ashwani
Goyal Response Golden Forests India Ltd writes: Please refer to the complaint of Mrs Charanjit Kaur, she had invested Rs 1,500 on 25.10.94 and Rs 2,500 on 20.10.94 for three and a half years. The company had issued post dated cheques bearing Nos 024537, dated 25.4.98, amounting to Rs 3000 and cheque No 024196 dated 20.4.98 amounting to Rs 5,000 in favour of Mrs Charanjit Kaur. However, cheques were not presented to the bankers for encashment in time. The company is ready to
make the payment to her if she returns the cheques to the
company. There is not a single complaint about the
non-payment of the maturity. |
Q: Kindly evaluate the prospects of Escorts Ltd.? — Balbir Singh, Patiala Ans: Escorts’ third tractor plant is coming up at Pune and will be operational in the third quarter of ‘99 taking the Escort’s manufacturing capacity to 80,000 tractors. Adjacent to the tractor plant at Pune, a new joint venture with Carraro SPA set Italy for the manufacture of axles and transmissions is being set up, which would support the tractor manufacturing programme of Escorts. The company has also launched an upgraded tractor model in the 2240 HP segment and has plans to enter the 60-80 HP segment as well. Escorts believes that entry into this segment would enhance its market share to 24 per cent over the next 4 years. Escorts exported 919 tractors during the financial year 1997-98 and expects to export 3500 tractors during the current year. With the currency depreciating, the company stands register gains. Escorts would complete a total investment of Rs 240 crore in the modernisation and expansion plans of its agri-business, and would also be able to finance its future business expansion without taking recourse to borrowings. The long-term prospects of this company thus seem to be fairly satisfactory. Q: Are the prospects of Visualsoft (India) Ltd. in which, I hold shares, secure? Please comment in detail. — Mahesh Matoo, Nalagarh Ans: Visualsoft (India) Limited (VSIL) is a Hyderabad-based software development company which is primarily engaged in providing comprehensive software solutions for its clients using a range of leading edge technologies like Client/Server, Groupware, Intranet, Workflow Automation and Trasaction Web. It is also into re-engineering and Y2K and providing Internet solutions. The thrust is on providing ‘Future Technology’. Visualsoft has two development centres (leased building), both situated at Hyderabad. One development centre (The Y2K factory) is dedicated solely to Phatinum Technology Inc, USA, with whom the company has a tie-up to market Visualshift. The company’s R&D group had developed Visualshift, a product which is gaining recognition as time passes. This group is in the process of developing certain tools/components which would enable the company to capture future markets like Internet, e-Commerce, Intranet, etc. If one were to include income from Visualshift, the EPS for 1998-99 would be around Rs 15.5. The prospects of this company appear to be fairly secure. Q: Should I hold or sell the shares of Philips India? — Sarabjit Kaur, Jalandhar Ans: Philips India Ltd. (PIL) has implemented a proposal to shift the Salt Lake factory near Calcutta to Pune, and to offer selective ‘transfers’ to employees of the Salt Lake factory to Pune, where it will be setting up an integrated ‘sound and vision’ factory. The development laboratory in Salt Lake is also being moved to Pune. PIL’s strategy for its Salt Lake unit is in conformity with Philips’ global policy to stake off loss making businesses. Starting Jan. 1, ‘98, therefore, all Philips businesses worldwide may be sold off wherever the bottom line is red. It is in this scheme of things that the global telecom operations of Philips have been sold to Simoco of UK. Multiple production facilities anywhere are being closed down in favour of a single composite unit. The entire range of audio and video production may be centered at the Pimpri factory at Pune where PIL will essentially do the hi-tech PCB fabrication job. The video bundling could be shifted to the Japanese Bay in Noida with big moulding plants situated there, and at least two big picture tube manufacturers nearby. Mohali, off Chandigarh, is another major bundling centre under consideration. Discount packages have been rationalised, sales officers have been deployed for better customer interface and demonstration of products, and the choice of dealers is being given importance. Besides, the supply chain structure has been rationalised. The long-term prospects of this company are thus quite promising and hence shareholders could remain invested in this company. Q: How do you rate the prospects of Duncans Industries, in which I hold shares? — Aseem Lodhi, Chandigarh Ans: A part of the Duncan-Goenka group, Duncan Industries Ltd. (DIL) has diversified interests in the tea and fertilisers segment. The former constitutes 20 per cent of the company’s sales while the latter contributes 80 per cent. The company operates 12 tea gardens and markets its products under brand names like Gold Cup, Sargam. The fertiliser division of the company has been hit severely on account of excessive imports. It thus appears that the company will witness a testing period in the coming years. Q: Should I hold or sell the shares of Cable Corporation of India? — Neel Gajjar, Solan Ans: The
largest Indian manufacturer of power cables, Cable
Corporation of India Ltd (CCIL) was the first Indian
cable company to obtain an ISO 9001 certification. The
company commands about one-fifth of the organised power
cable market. The performance of the company on the
financial front has been satisfactory over the years. The
decline in the company’s margins has been attributed
to a marked increase in competition and lower demand for
cables owing to which the company has resorted to
offering discounts, which in turn have resulted in a fall
in realisation levels. However, the future plans of the
company include the setting up of a new unit, besides
implementing the modernisation of its existing
facilities. One could thus hold on to its shares for the
time being. |
AIR INDIA (AI) Managing Director Michael Mascarenhas’s recent press briefing here seems to have been misinterpreted by some that the national carrier is ‘breathing for its life’. It is far from true. The airline’s financial health may not be very stable but there is certainly no cause for panic. Those, who had been critically monitoring the progress of the airline for the past four or five years, feel that the national carrier had withstood the storm and if political interference is reduced in the day-to-day functioning, the airline may improve its performance. Airline officials, for a change are convinced that the money saved through economical measures in overhead expenses is a ‘priceless’ method for “Maharajah” to stand up on his own. The airline will soon shut two units in Himalaya House and Hansalaya building. The Himalaya House staff, including those commercial establishment, will move to Scindia House which has so far remained locked because of litigation. Similarly, Director (Delhi) office, public relations unit and other departments in Hansalaya House will move to Rajiv Bhavan where Air India had a fully furnished office. Some staff may be shifted to the airport. Air India will effect a sizable saving through these shiftings. Airways kids service British Airways (BA) has decided to buy 59 single aisle airbus industries aircraft. This contract is the first firm order arising from the airline’s announcement that it would purchase up to 188 A-320 family aircraft. The order consists of 39 A-319s and 20 A-320s. All aircrafts will be powered by IAE engines. This order is said to be the first that BA has placed directly with airbus industry. BA has already completed a decade of its Chennai operations. The airline was the first European carrier to introduce scheduled services to Chennai on November 4, 1988, with twice weekly Tristar services via Kuwait. Now, BA operates twice-weekly non-stop services between UK and Chennai with Boeing 747-400 aircraft. With many first, BA was that first airline to set up a cabin crew base in Chennai and it also appointed cabin crew who could speak South Indian languages. The airline plans to enhance these services and introduce more flights to serve the growing South Indian market. The airline had decided to introduce “feed kids first”, creche and boggy service and “treasure chest” offering free toys and games. Mr Bob Ayling,
airline’s chief executive says: “We have
listened hard to our customers and are providing them
with what they want — not glitz and hype, but lots
of real practical improvements”. |
Q: We are registered as a dealer under the provisions of the Haryana General Sales Tax Act, 1973 and the Central Sales Tax Act, 1956. In relation to the assessment year 1993-94, the assessing authority raised some additional demand against us by way of leaving tax and penalty under the Haryana General Sales Tax Act, 1973. On appeal, the Joint Excise and Taxation Commissioner (Appeals) set aside the said demand upholding the contentions raised by us. However the assessing authority on our application seeking refund of the amount deposited in pursuance of the demand opines that since the department proposes to take the order passed by the Joint Excise and Taxation Commissioner (Appeals) in suo motu proceedings for revision, refund cannot be allowed in terms of Section 43. Kindly advise if the action of the assessing authority is justified in law? — Raman Kumar, Hisar Ans: Once the order passed by the assessing authority raising the demand is set aside in the appropriate proceedings by the appellate authority, the refund of the amount deposited by the assessee after assessment cannot be withheld simply on the ground that the department wishes to revise the orders of the appellate authority. On similar facts, the Punjab and Haryana High Court in the case of Messrs Rama Trading Company, Karnal v. State of Haryana and others, Civil Writ Petition No 3822 of 1993 held when the assessment order is set aside, the assessee becomes entitled to the refund of the amount in accordance with section 43 of the Haryana General Sales Tax Act, 1973 read with rule 35 of the Haryana General Sales Tax Rules, 1973. It was further ruled by their lordships “mere contemplating proceedings for making a fresh assessment would not entitle the department to retain the amount of tax deposited. In such like cases, the department should be prompt in making refund of the amount instead of coercing the petitioner to approach the courts for redressal of the grievance and thereby causing harassment”. This case came to be reported in Volume 8 of (1996) Punjab and Haryana Taxes at page 367. Q: An order of assessment was made by the assessing authorities raising some demand under the Punjab General Sales Tax Act, 1948 without affording a reasonable opportunity of being heard. In appeal, the appelate authority requires us to make the payment of the disputed amount first for the entertainment of appeal. Kindly advise if entertainment of appeal without payment of the disputed is not possible? — Kulvinder Singh, Jalandhar Ans:
Under Section 20 of the Punjab General Sales Tax Act,
1948 the appellate authority is authorised to entertain
and hear the appeal against assessment order only if the
payment is made or that when the appellant satisfies the
appellate authority that he is unable to pay up the
amount because of financial difficulties. If you are able
to prove your weak financial position you have a right to
get your appeal entertained and heard on merits without
payment. |
Cronyism, corruption caused Asian crisis WASHINGTON: Hitting out at the critics of the IMF’s policies. Managing Director Michel Camdessus has blamed cronyism, corruption and disorderly liberalisation for the east Asian economic meltdown. “It is Cronyism, corruption and disorderly liberalisation and not the fault of the IMF that caused the meltdown” says Mr Camdessus in an article in the Washington Post. Mr Camdessus, defending IMF policies as relevant to today’s crises has said that the continuing Asian financial turmoil and its cures are more complex and run deeper than is generally recognised. “They originated in serious deficiencies in national economic policies”, he said. Insisting that the IMF had a key role in “correcting the major flaws in the international financial system”. He was replying to criticism by former US Secretaries of State Henry Kissinger and George Schultz, and former Treasury Secretary William Simon who have doubted IMF’s role in the global economy saying it understood neither the cause nor the cure of the global economic crises. — PTI Protest HONG KONG: Some 200 Chinese investors, angry over a multi-million dollar futures market scam, marched through the streets of Beijing on November 11 in what was reported to be one of the biggest protests in the Chinese capital since the 1989 Tiananmen Square demonstrations. They felt they were cheated by a Taiwan resident having close ties with the Chinese military establishment. They were also protesting against what they called unfair reporting of the case by the official news agency Xinhua. — ANI Ailing economy TOKYO: Japan plans to help rescue its ailing economy with the world’s biggest shopping coupon giveaway, worth $ 5.8 billion, but the scheme is already under fire. Economists and business leaders say the ruling party’s latest stimulus plan is just a political manoeuvre to forge closer ties with opposition forces and ensure a smooth ride in Parliament. The Governing Liberal Democratic Party (LDP) has struck a deal with major opposition Komei Party to hand out the vouchers to people over the age of 65 and children under the age of 15. The recipients will each be entitled to 20,000 yens worth of coupons, worth a total 700 billion yen (5.8 billion dollars). — AFP Recession SINGAPORE: A high-level committee has recommended sweeping business cost-cutting moves worth an estimated 10 billion Singapore dollars a year to help Singapore ride out of its recession. The proposed business cost-saving measures will be equivalent to 7 per cent of the Island’s gross domestic product. The government-business committee of Singapore’s competitiveness, rejecting currency depreciation as an instrument to spur growth, called for a 15 per cent cut in total wage costs as the centerpiece of its plan. It also proposed basic
strategies to boost Singapore’s competitiveness as a
manufacturing, finance and business centre in the 21st
century. — AFP |
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| Inflation spurts NEW DELHI, Nov 15 (PTI) — The annual rate of inflation shot up for the second successive week and touched 8.51 per cent during the week-ended October 31 due to sustained increase in prices of essential commodities. Inflation during the previous week stood at 8.20 per cent while a year ago it was at a low of 3.73 per cent. Though prices of essential commodities rose throughout October, this was reflected in the inflation calculated on the wholesale price index (WPI) only during the last two weeks of the month. Montex
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