Friday, December 7, 2001, Chandigarh, India






National Capital Region--Delhi

B U S I N E S S

Enron cannot sell DPC stake unless
loans are settled: FIs

Mumbai, December 6
Taking a tough stand on recovery of their multi-crore loans from Dabhol Power Company (DPC), following its promoter, Enron Corp’s, bankruptcy, IDBI led financial institutions have said the US multinational will not be allowed to sell its Indian arm unless their loans for the $ 3 billion project are settled.


A new computer virus named 'goner' could prove to be the most destructive since last year's 'love-bug' e-mail hit home and personal computers.
(28k, 56k)

Lessons from American management
G
ERALD Greenwald is the typical American story of the son of an immigrant Jew family who had to earn his way through college and hard-work his way into the club of super-achiever path-finder American Managers.

Scale down export target: FIEO
New Delhi, December 6
The Federation of Indian Export Organisations (FIEO) today asked the government to halve its export target for the current fiscal as non-implementation of various government policies including labour reforms was limiting export prospects.



EARLIER STORIES
THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS

UTI: no redemption pressure for US-64
New Delhi, December 6
Unit Trust of India today sought to allay apprehensions on redemption pressure for US-64, saying that it had been low and redemptions stood at Rs 48 crore in November this year as against a total of Rs 176 crore redeemed in the previous two months of 2001.

Direct tax collections up
New Delhi, December 6
Direct tax collections was up by 9 per cent at Rs 44,009 crore during first eight months of 2001-02, as against Rs 40,412 crore during same period last fiscal.

Rites bags contracts
New Delhi, December 6
Rites, a Government enterprise under the Ministry of Railways, has bagged a technical assistance contract from the Central East African Railways (CEAR), Malawi. The technical assistance will be for two years in which senior experts of Rites will assist the Malawian Railways.

SBI interlinks ATM in 9 cities
Chandigarh, December 6
State Bank of India today inter-linked 149 ATMs covering 300 branches in nine cities across the country. The bank also launched its ‘hub and spokes’ to facilitate quick disposal of the personal loans.

Escotel slashes call charges
Chandigarh, December 6
Escotel has announced reductions of as high as 50 per cent in its airtime charges in Haryana.

ROUND-UP

HC bar on gas export to India
Dhaka, December 6
Now came a large bar on gas export to India through pipeline. However, the bar is for three months only.

  • Gucci says no to Indian leather

  • Microsoft unveils Chinese Pocket PC



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Enron cannot sell DPC stake unless
loans are settled: FIs

Mumbai, December 6
Taking a tough stand on recovery of their multi-crore loans from Dabhol Power Company (DPC), following its promoter, Enron Corp’s, bankruptcy, IDBI led financial institutions have said the US multinational will not be allowed to sell its Indian arm unless their loans for the $ 3 billion project are settled.

“Enron is free to sell its stake in DPC to anybody, anytime and anywhere, but only after it settles the dues, running into several thousand crores, to the Indian lenders”, a senior FI official told PTI here today.

Following its bankruptcy, Enron Corp has either been pulling out of its worldwide operations or trying to reorganise them to raise funds.

Holding 65 per cent stake along with GE and Bechtel who have 10 per cent each in DPC, Enron has said it wants to exit India, but two potential Indian buyers — power utlities Tata Power Company (TPC) and BSES Ltd — have not yet signed the confidentiality agreement to carry out due diligence for the distressed 2,184 MW project.

“The reason is clear, TPC, BSES and FIs are closely monitoring the developments. Of course, they will try a hand on hard bargain since the value of DPC was depreciating due to its distressed sale”, he said.

The IDBI led FIs have an exposure of upto Rs 6,204 crore and unlike the foreign lenders who have pumped in $ 600 million in the vexed project, they would not be able to get their funds back in case of a default by DPC.

However, the official did not deny that the FIs would have to take a hit on their books in 2002 to the tune of over Rs 600 crore, if DPC does not pay interest for December 2001 and March 2002.

Enron Corp’s bankruptcy would have a lesser impact on the Indian financial institutions, he asserted.

“If these loans remain unpaid, we have the right to exercise the option of taking over the plant as our funding has been on a non-recourse basis and DPC’s assets and liabilities are already pledged with us”, he added.

The ISBI Chairman, P.P. Vora, had recently reiterated that DPC was not an “NPA” and that the company had paid its quarterly interest for phase one loans by September 30.

The official said DPC’s daily interest chargeable is upto Rs 3 crore and the another quarterly payment is due on December 30.

However, a senior analyst following Enron Corp’s bankruptcy said that IDBI and others might need new capital as a result of their DPC exposure if the loans “trespass” into being non-performing assets.

“This could create a problem as FIs and banks should be able to meet minimum capital requirements and provisioning standards”, he said.

The IDBI has an exposure upto Rs 2,121 crore, ICICI — Rs 1,473 crore, SBI — Rs 1,749 crore, IFCI — Rs 454 crore, Canara Bank — Rs 407 crore in the project which has stopped generating power since June, after Maharashtra State Electricity Board refused to offtake power, alleging that the multinational had misrepresented its capacity. PTI

Enron axes DPC staff

After filing for bankruptcy protection in the United States, Enron Corporation has axed its over 150 employees in India but retained Dabhol Power Company’s Managing Director K.Wade Cline and few others on a contract basis as its “core team”.

A day after it filed the bankruptcy suit in US courts last Sunday, Enron Corp communicated its decision to lay off the employees of DPC and Enron India with December 7 as a deadline.

DPC spokesperson said the company regrets that it would lay off all its “remaining” employees in India including those based at the site of the $ 3 billion plant. PTI

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Lessons from American management
Chandra Mohan

GERALD Greenwald is the typical American story of the son of an immigrant Jew family who had to earn his way through college and hard-work his way into the club of super-achiever path-finder American Managers. The beauty is that he won his spurs in races which were traditional preserves of engineers and bean-counters. His graduation was in public and international affairs.

The essence of his success lay in team-honing and team-play. Foundations of this trait were laid when he was still in college: his team of 9 could clear and lay a table for 250 in the dining hall in 24 minutes flat.

His career began at Ford, soon after the Edsel debacle. Henry Ford II, surrounded by his yes-men ruled it as a spoilt despot and emperor.

In a company well-known for its anti-semitism, it was surprising that he soon picked up for the fast-track. Fast-track too him through Brazil, France, England and Venezuela and experience with diverse cultures and widening responsibility: finance; labour relations; products. The last gave him opportunity to run a total company as his own; also an experience of a country where kidnapping for ransom was common.

Ford also taught him what goes wrong. Dissent was just not permissible to the man whose name was on the building and he constantly reminded you of his power. Witch hunts and spy-runs were common. The very best were fired on the spot for aggressive ideas: Laccoca, Sperlich. In that game wasted resources, paperwork and chewed-up ideas were legion. Hierarchy and petty status symbols was life.

His chance to say goodbye to Ford came in the Chrysler baleout with Laccoca and endless negotiations with bankers and creditors for the relief package. He also learnt the art of political networking where egos dominated and just being right cut no ice. He had to agree to Russel’s price of immediate sacrifice by workers for long-term compensation through ESOP’s at Chrysler. Rescue of the tons of agreement documents by his team through fire in the last seconds re-affirmed his confidence in team-work. He also got his lesson in fancy market research. Ask the question who did it, and; sometime gut instinct is far better. 11 years was long enough to move on.

Fate took him to the unique $ 2 billion plus management buyout of United Airlines, first as a shadow CEO taking it through the difficult creditor-employee negotiations and then running the company. Self-ownership by a 76,000-man troop is easier said that done; it meant immediate pay-sacrifice for long-term compensation via stock ownership. Reconciliation of group and individual interests of different layers was not easy; flight attendants refused to join. Board composition and overall policy to resolve conflicting group-interests itself took time to evolve. Eternal worker-management conflict posed some of the trickiest: right to hire and fire; downsizing in a recession.

Pioneering the concept through formative years required every human skill. To make people accept that ownership was not free licence and the customer alone was their job provider and came first, was not easy. But answers were worked out by Greenwald bit by bit.

United became the most successful and profitable of the US airlines and in period when global airline industry has been passing through a crisis.

Management buyout is an interesting option in PSU disinvestment. Recent attempt at management buyout in CMC was most heart-warming. An excellent opportunity for creating a new business model was lost in the exercise of government option in favour of direct cash-sale to TECS. Wasn’t it an antithesis of the philosophy that we preach to family-owners: professionalise management. Shouldn’t we take courage from successes like Unilever, General Motors, IBM, ITC and Shell?

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Scale down export target: FIEO

New Delhi, December 6
The Federation of Indian Export Organisations (FIEO) today asked the government to halve its export target for the current fiscal as non-implementation of various government policies including labour reforms was limiting export prospects.

“Poor productivity of labour is impacting our performance and though both the Commerce and Finance Ministry are concerned about falling exports, the Labour Ministry does not seem to be pushing the agenda of labour reforms,” S.K. Saraf, Vice-President of (FIEO), told PTI here.

Saraf, who is also officiating President of FIEO, said “with less than four months to go before the fiscal ends, and exports during April-October showing a decline of 2.88 per cent, the government should scale down export target from 12 per cent to a more realistic level of 6-7 per cent”.

He said non-implementation of government policies was hurting exporters the most, particularly slow pace of labour reforms. “We have had economic reforms, technical reforms and fiscal reforms, but nothing has happened on the labour front”.

A hire and fire policy or contract labour would not cause unemployment or loss of jobs, he said.

“This is a misplaced notion. Improvement in labour productivity will make Indian goods more competitive, increase their demand which in turn will generate more demand for labour”, Saraf reasoned.

In addition to this, the government should immediately clear pending drawback and announce continuation of DEPB benefits as exporters were avoiding booking new orders in the face of the uncertainty over continuation of the scheme beyond March 2002.

The government should also extend for atleast five years the income tax benefits to exporters under Section 80 HHC as it was not non-WTO compatible, Saraf said.

He said that the export incentives given to exporters were required as it merely amounted to reimbursement of the transaction costs which were very high in India.

“At present exporters spend all their time moving their cases between the Finance and Commerce Ministries,” he added. PTI

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UTI: no redemption pressure for US-64

New Delhi, December 6
Unit Trust of India today sought to allay apprehensions on redemption pressure for US-64, saying that it had been low and redemptions stood at Rs 48 crore in November this year as against a total of Rs 176 crore redeemed in the previous two months of 2001.

“The US-64 redemption pressure has been low. In November the redemptions were Rs 48 crore as compared to Rs 88 crore each in the previous two months,” UTI Chief M. Damodaran said here after meeting top Finance Ministry officials today.

He reiterated that the UTI would stick to January 1, 2002 deadline of converting US-64, the monthly scheme, into net Asset Value (NAV) based scrip.

UTI which resumed US-64 redmeption in August, had fixed the assured repurchase price at Rs 10 per unit for august and would increase by 10 paisa every month till May 2003.

Replying to a related query on whether UTI had made any proposal to Infosys, he said, “No”.

According to infosys, UTI currently holds 5.7 per cent equity, which translates into 37,72,035 shares, in the Nasdaq listed IT company. PTI

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Direct tax collections up

New Delhi, December 6
Direct tax collections was up by 9 per cent at Rs 44,009 crore during first eight months of 2001-02, as against Rs 40,412 crore during same period last fiscal.

Although gross direct tax mop up was higher, net collections of Rs 31,851 crore was 0.4 per cent less than Rs 31,975 crore during April-November 2000, official sources said here today.

In net terms, direct tax collections accounted for 37.4 per cent of budgeted Rs 85,275 crore for the entire fiscal.

Net collection in direct taxes was less on account of heavy refunds of Rs 12,158 crore till November, which is 44 per cent more than Rs 8,437 crore refunded during the same period last fiscal. PTI

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Rites bags contracts

New Delhi, December 6
Rites, a Government enterprise under the Ministry of Railways, has bagged a technical assistance contract from the Central East African Railways (CEAR), Malawi. The technical assistance will be for two years in which senior experts of Rites will assist the Malawian Railways.

The contract was signed here during the visit of Rul Fonseca, President and Chairman of the Board of Directors, Mozambique Railways and Vice-Chairman of the Board of Directors of CEAR.

A press release issued by Rites here yesterday said Rites would provide services of experts for the positions of Chief Executive Officer and Chief Finance Officer for CEAR. TNS

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SBI interlinks ATM in 9 cities
Tribune News Service

Chandigarh, December 6
State Bank of India today inter-linked 149 ATMs covering 300 branches in nine cities across the country. The bank also launched its ‘hub and spokes’ to facilitate quick disposal of the personal loans.

Lt Gen JFR Jacob, Governor Punjab and UT Administrator inaugurated the two new services by the bank here today.

“The customers will now be able to transact business through their ATMs in any of these branches”, said Mr S. Govindarajan, Managing Director of the bank while speaking at the inaugural function.

He said that Chandigarh is now the ninth city after Mumbai, Hyderabad, Chennai, Ahmedabad, Pune, Kolkata, Delhi and Bangalore and soon the bank will include other cities including Bhopal, Bhubaneswar, Gauwhati, Lucknow and Patna.

The hub and spokes facility will enhance customer convenience and meet their loan processing and disbursement process faster at any of the 14 branches of the bank in the city, said he. The network spread across the city branches will ensure that whenever a loan application is filed in any of the identified branches, the application will instantly reach the designated officer at the ‘Hub’ where it will be immediately processed.

Mr Govindarajan said SBI has 2,700 fully computerised branches covering almost 80 per cent of the bank’s business across the country and by March 2002 the bank plans to computerise all its branches.

“The bank will continue taking initiatives in introducing new services like the tele-banking, networking of branches, electronic payment system for faster remittances and speedier collection of outstation instruments etc”, said he.

Mr Rajinder Kakkar,Chief General Manager and Mr D.L. Manwani, were also present on the occasion.

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Escotel slashes call charges
Tribune News Service

Chandigarh, December 6
Escotel has announced reductions of as high as 50 per cent in its airtime charges in Haryana.

“With this we expect to increase our customer base in the state to one lakh by February, said Mr Deepak Khanna, Chief Operating Officer, Escotel, Haryana.

On post-paid connections, the customer will now pay a flat tariff of Rs 2.40 per minute under the new Value Plus Tariff Plan where the monthly rental will be Rs 299.

Under the Millennium Plan, the incoming call charges have now dropped to Rs 1.20 per minute. “One of the best options will be the new value tariff plan under which the incoming call charges are only Rs 1.20 for two minutes and Rs 1.20 in case of outgoing calls”, said Mr Khanna .The CLI facility will be charged at Rs 50 per month.

In case of pre-paid, every call will be charged for Rs 3 per 30 seconds for outgoing and Rs 3 per minute for incoming.

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ROUND-UP

HC bar on gas export to India

Dhaka, December 6
Now came a large bar on gas export to India through pipeline. However, the bar is for three months only.

A Division Bench of the High Court in an order on Wednesday put a bar for three months on export of Bangladesh gas to India through pipeline. The order came on a writ petition by Shah Abdul Hannan, Chairman of Islami Bank, a Pro-Jamat-e-Islami financial organisation. He has retired as Chairman of the Bangladesh Board of Revenue during the former BNP regime. The judge also asked the government not to lease any more blocks for exploration.

The petitioner in 1998 challenged the legitimacy of 13 Profit Sharing Contracts (PSC) with the foreign exploration companies on which the Division Bench issued rule nisi. However, he did not pursue the case and remained pending. He filed a fresh writ petition urging restriction on export of gas to India. TNS

Gucci says no to Indian leather

Mumbai
The Italy-based Gucci group has announced that it will boycott leather from India until the government takes steps to enforce basic animal protection laws.

A release issued by PETA here today stated that Gucci, in a letter to People for the Ethical Treatment of Animals (PETA), joins other fashion houses such as Espirit and TJX, who had earlier joined a host of retailers and manufacturers, including, Gap, Reebok, Nike and others, by refusing to support unlawful animal abuse after being briefed by PETA about the inhumane treatment of animals killed for leather. UNI

Microsoft unveils Chinese Pocket PC

Taipei
Microsoft Corp on Thursday unveiled a Chinese version of its new Pocket PC 2002 software for handheld computing, in a bid to tap into Greater China’s corporate market.

Dave Wright, General Manager of Microsoft Asia’s Mobility Group, told Reuters the Chinese Pocket PC 2002 could achieve significant growth in terms of market share by working closely with local developers and manufacturers.

Microsoft will begin marketing the Pocket PC 2002 in China soon, and did not offer any sales forecasts for Taiwan or China. Reuters

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BIZ BRIEFS

Canara Bank
Bangalore, December 6
Canara Bank today announced reduction in the interest rate on Housing Loans to 11.50 per cent upto a loan of Rs 2 lakh under floating rate option. The rates for Rs 2 lakh to Rs 10 lakh and exceeding Rs 10 lakh would be 12 per cent and 12.50 per cent respectively in case of fixed rate loans. UNI

Oriental Bank
Amritsar, December 6
The Oriental Bank of Commerce today disbursed more than Rs 1.25 crore for the various housing projects in the city. The loans have been given at the 11.5 per cent interest which was being the lowest in the banking circles. 

Mr S.K Sharma of Swaraj Mazda, who has been elected national Vice-President of the Indian Institute of Materials Managament for two years (2001-03). OC

Lufthansa Cargo
New Delhi, December 6
German logistics service provider Lufthansa Cargo today said it would withdraw the 0.10 Euros fuel surcharge imposed on all shipments with effect from December 20, 2001. PTI

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