Thursday, April 15, 1999
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B U S I N E S S | Thursday, April 15, 1999 |
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Ensure passage of Finance
Bill: CII chief Agriculture Ministry website
launched |
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Plea to revoke order on
charge of depot
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Industry mourns H.P.
Nanda’s death LG, Samsung evade Rs 2 crore in
taxes Crop insurance scheme to cover 100
blocks Uncertainty over rights issue
worries employees NEPZ exports up by 10 per cent in
dollar terms SEBI suspends 2 merchant bankers Bank of Punjab is Y2K compliant Reliance deb gets ‘AAA’ Cement industry to grow by 10 per
cent BEL records 1,205 crore sales
turnover |
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Ensure passage of Finance Bill:
CII chief NEW DELHI, April 14 — Alarmed by the political uncertainty triggered off by the withdrawal of support by the AIADMK to the Vajpayee-led coalition Government at the Centre, industry organisations today urged the political leaders to put aside their differences and ensure smooth passage of the Finance Bill. “It was extremely important to get the Finance Bill passed in the interest of the national economy,” said Mr Rajesh Shah, president of the CII, who took the lead in evolving a consensus among the industry chambers and political parties. The uncertainty about the stability of the Vajpayee led coalition government at the Centre have already taken its toll on the capital market with the political tremor reported to be sending major stock indices on tail spin. The market turned jittery about the very survival of the Central Government as the fall could jeopardise the Finance Bill and in turn the reforms process. Equities fell by nearly 5.5 per cent during the week ending April 9 on panic selling by bull operators and marketmen attributed the fall primarily to political uncertainty.The threat to the government has also slowed down the flow of foreign funds. In the wake of the recent politically fluid situation, the positive affects of the recently announced Exim policy has also failed to provide the anticipated boost in the stock markets. Mr Shah said that it is extremely important that the Finance Bill be adopted keeping in mind the affects on the national economy, the capital market, investment and image of nation. The World Bank has recently warned that there are downside risks from India’s high fiscal deficit to the 4.8 per cent projection made for Inda by the bank last week. Analysts said that a longer political uncertainly could imply a sharp fall in portfolio investments ( loans, bonds and equities) and also a fall in foreign direct investments, both of which could be detrimental for the health of the economy. World Bank’s capital market expert and principal author of the India Development Report 1998, Mr Ashok Modi said that bucking the trend of declining FDI were the now recovering economies of Thailand and South Korea. However, these two economies were recovering fast after the East Asian crisis and that make the inflow of foreign funds to India much more difficult. The fallout of the political uncertainty on the flow of foreign funds nothwithstanding, domestic economic activity also tends to get adversely affected by such a fluid situation. It has been reported that the launch of Enron Corporation’s Dabhol Power Project could be postponed with the Prime Minister reportedly not prepared to leave the capital. Enron had planned a high
profile launch of the $ 1.7 billion 740 MW power project
on April 17 with the Prime Minister, Mr Atal Behari
Vajpayee as the chief guest . |
Plea to revoke order on
charge of depot FARIDABAD, April 14 — The Faridabad Chamber of Commerce and Industry has protested to the Chief Commissioner of Customs and Central Excise, New Delhi, against the decision to shift the charge of the inland container depot, Ballabhgarh, Faridabad to, the Commissioner of Customs at Tughlakabad (Delhi). In a letter to the Chief Commissioner, Mr Hardip Mahajan, President of the Chamber, pointed out that the decision, which became effective from February, had added to the problems to the exporters and importers of Faridabad. Under the changed circumstances they would have to rush to Tughlakabad, which was 20 km away from here, for completing the various formalities. In some cases they would have to go to Patparganj (Delhi) which was 50 km away from here. The decision would also make it difficult for trade and industry in Faridabad to avail of drawback through cheque signed by the local authority. Mr Mahajan urged the
Chief Commissioner to withdraw the order and restore the
charge at the depot to the Faridabad office of the
Commissioner of Central Excise. |
Agriculture Ministry website launched NEW DELHI, April 14 (PTI) — The Agriculture Ministry today launched a website on Internet and set up a control room for bringing more transparency in the functioning of the ministry and dissemination of information on the agricultural sector. “The control room has been set up with a view to make the ministry accessible round the clock so that the public system of agriculture could be made more accountable and efficient,” Agriculture Minister Sompal said while inaugurating the centre here. The ministry’s website, designed by the National Informatics Centre (NIC), will contain information about the programmes and schemes of the ministry, prices of farm produce, agricultural statistics, daily weather conditions and various documents and reports. The interactive website
also seeks peoples’ response and suggestions on the
activities of the ministry. |
Industry
mourns H.P. Nanda’s death NEW DELHI, April 14 — The business community today expressed grief over the demise of Chairman Emeritus of Escorts group, Mr H.P. Nanda. Mr Nanda died yesterday after a protracted illness. Expressing condolences at the passing away of Mr Nanda, the President of Confederation of Indian Industry (CII), Mr Rajesh Shah said that Mr Nanda would be dearly missed by the business community as well as in the social sector. The CII President said that CII would fondly remember the yeoman service to the Bharatiya Yuva Shakti Trust now popularly known as BYST, which helps underprivileged youth who wish to set up their own business. The towering presence of Mr Nanda was equally imposing in the corporate world ever since he set up the Escorts company in the year 1948. The company became a leader of tractors , motorcycles and automotive components segment when he was at the helm of affairs, Mr Shah said. The President of Federation of Indian Chambers of Commerce and Industry (FICCI), Mr Sudhir Jalan said that Mr Nanda was one of the leading industrialists of the post partition era and had worked assiduously for building an industrial empire. He inspired the people around him and instilled in them innovative ideas and concepts. Mr Nanda’s contributions were immense in laying a strong base for India, Mr Jalan observed. The President of Associated Chambers of Commerce and Industry of India (Assocham), Mr K.P. Singh said that the Chamber will miss his world view and guidance in steering the Indian economy through difficult times. The President of PHD
Chamber of Commerce and Industry (PHDCCI), Mr Ashok
Khanna said India has lost a great doyen of the industry.
Mr Khanna said that the death of Mr Nanda has left a void
which cannot be filled. |
IFCI to buy back high cost bonds NEW DELHI, April 14 (PTI) — Industrial Finance Corporation of India (IFCI) will buyback its high-value bonds from the market in an effort to bring down its cost of borrowings, a top company official has said. The institution would reduce the cost of funds by buying back the bonds bearing high interest rates and replace them with new bonds having lower interest rates, Chief General Manager of IFCI, S.C. Kumar told PTI. During 1998-99 itself, IFCI replaced bonds issued to provident funds on a private placement basis worth Rs 200 crore, besides Rs 30 crore worth bonds issued to corporate houses, he said. Buyback of high cost bonds has been necessitated following a general decline in the interest rates over the last two years making most of its existing bond portfolio dearer. He said IFCI would continue to buyback its high cost bonds during 1999-2000 even as it would come out with fresh bond issues at a lower rate of interest. Mr Kumar said there was general slack in demand for funds from corporates and attributed this as the main reason for decline in interest rates. Mr Kumar said the institution adopts two ways to buyback its high cost bonds. First, by using the put option in-built in the bonds at the time of offering. At the time of issuing the bonds, the institution generally keeps an option to buyback the bonds before its maturity date. The put option is kept as an hedge against an adverse movement of interest rates. Mr Kumar said the institution was also looking to exit from the high interest rate bonds through the secondary market. “As and when the secondary market for debt becomes more active, we would certainly buyback through this route,” he said. Last year, Kumar said
most of the bonds bought back were from the provident
funds using the put option. |
LG, Samsung evade Rs 2 crore in taxes NEW DELHI, April 14 (UNI) — The Income Tax department has detected that two South Korean chaebols — LG Electronics and Samsung Electronics — have allegedly evaded taxes to the tune of Rs 2 crore in their respective Indian operations. The premises of the Indian subsidiaries of both Korean conglomerates were surveyed and the companies were found to have not been complying to tax deduction at source (TDS) for its Korean employees in India, a senior IT department official told UNI here today. While LG Electronics India Limited, (LGEIL) is stated to have evaded taxes to the tune of over Rs 1 crore, Samsung Electronics India Limited (SEIL) had already evaded close to Rs 1 crore in tax payments. The irregularities have been detected and notices issued to these companies. It has been alleged that Korean officials working with LGEIL were getting two salaries — one paid in India and the other in Korea. As per the Indian Income Tax law, foreigners working in India have to file a declaration of any income earned by them abroad with their Indian employer. The Indian employer is then responsible for deducting tax at source on the total income of the foreign employee. The officials further
stated that pursuant to the notices, the companies have
expressed willingness to pay the arrears. |
Crop insurance scheme to cover 100 blocks NEW DELHI, April 14 (PTI) — The modified comprehensive crop insurance scheme (MCIS) will be introduced initially in 100 blocks during the ensuing kharif season and its scope would later be expanded to the all India level, Agriculture Minister Sompal said here today. Agriculture Ministry has also sent a note for Cabinet approval to set up a subsidiary of General Insurance Corporation (GIC) for exclusively dealing with the crop insurance, Sompal told PTI in an interview. In other parts of the country, the existing comprehensive crop insurance scheme (CCIS) would continue till the time it is replaced by the new scheme, he added. The Ministry is also planning to set up an expert committee to finalise the modalities relating to insurance premium, role of the central agencies and the State Governments and involvement of Panchayati Raj institutions. It may take about two to three years to make MCIS fully operational throughout the country, covering all types of farmers and all crops, he said. The Agriculture Ministry has finalised the new crop insurance scheme after discussing about 25 different models, Sompal said. The modified comprehensive crop insurance scheme would cover all farmers including loanee, non-loanee, small and marginal farmers, Sompal said. Agricultural Ministry is considering two alternatives relating to charge of insurance premia and liability on account of claims. The first alternative is to extend a lumpsum fixed subsidy to the implementing agency and leave it to the agency to alter or modify insurance charges in such a way as to make the scheme internally viable. Another alternative is to fix the insurance charges and then cross-subsidise the difference between actual premium collected and the real estimated premium. The Ministry is of the view that the liability on account of claims under both alternatives would be the responsibility of the implementing agency. A separate GIC subsidiary would ensure that the scheme would be self-sustaining on a long-term basis and fully utilise the available international re-insurance facilities, relieving the exchequer of the burden. Appropriate safeguards
and mechanisms would be worked out to avoid misuse of the
scheme, Sompal said. |
Uncertainty
over rights issue worries employees NEW DELHI, April 14 - The 4,500-odd employees of the Bank of Rajasthan are worried over their future as the Supreme Court is yet to decide on the fate of the proposed Rs 67 crore rights issue of the bank. If the proposed rights issue does not come through, the bank may be on the brink of winding up because of its precariously low levels of capital adequacy ratio. As on March 31, 1998, the bank’s capital adequacy ratio was at 1.67 per cent against the mandatory 8 per cent. The RBI on December 7, 1998, had asked the bank to infuse Rs 60 crore to ensure substantial improvement in the capital adequacy ratio. The bank recently approached the Supreme Court pleading it to vacate a stay on the rights issue granted by the Jaipur High Court. The bank’s petition at the Supreme Court marks the culmination of various court cases filed against its rights issue. According to a senior bank employee “the people who are filing cases should know that the proposed rights issue is extremely critical for bank’s survival. Also over 4,500 bank employees and their families’ future is at stake”. It is intriguing that all the cases were filed by small shareholders who are spending amounts (legal fee) totally disproportionate to their holdings in the bank. “We would like to know the motive behind these spate of litigations. The Supreme Court should ask the investigating agencies to study the matter. We hope justice will be done to the bank”, said a representative of the bank employees. The proposed rights issue has the blessings of the RBI and SEBI. While the RBI directed the bank to immediately infuse fresh capital, the SEBI, after a rigorous scrutiny, has cleared the rights issue proposal. The Supreme Court is
expected to give its verdict by the end of this month. |
NEPZ
exports up by 10 per cent in dollar terms NEW DELHI, April 14 — The NOIDA Export Processing Zone (NEPZ) has registered an increase in turnover by over 10 per cent in dollar terms for the year 1998-99. According to the Development Commissioner of NEPZ, Mr A.K. Kundra, exports have gone up to Rs 750.3 crore during the year 1998-99, as against Rs 6041 crore during 1997-98 with a growth rate of 24 per cent in rupee terms and 10.2 per cent in dollars. He said the number of operational units in the zone has also increased from 50 to 106 “besides, 12 units are under active implementation”. Mr Kundra said the employment in the zone had gone up from 5000 in 1992-93 to 16900 in 1998-99 with an average growth rate of 29 per cent, he said. He observed that as an inland zone, NEPZ was ideally suited for the manufacture of low-volume high value and skill intensive products. Gems and jewellery and electronics sectors had noticeable presence in the zone, accounting for 50 per cent of the total exports. Mr Kundra said sector
specific infrastructure for software, gems and jewellery
units had been developed. Satellite data links facilitate
software exports. An earth station was available in NOIDA
and VSNL outfits had further supplemented this facility,
Mr Kundra said. |
SEBI suspends 2 merchant bankers MUMBAI, April 14 (PTI) — The SEBI has suspended the certificate of registration of two category I merchant bankers, Phoenix International Finance Ltd and Rockland Leasing Ltd for default on development of their underwriting commitment. Phoenix International Finance Ltd has been suspended till July 31 for defaulting on its underwriting commitment in the issue of Kanan Steels Ltd, SEBI said in a statement here today. Rockland Leasing Ltd
defaulted on its underwriting commitment in the issue of
Pasupati Fabrics Ltd, Elque Polysters Ltd and BSM Knit AB
India Ltd and has been suspended till October 15. |
Bank of Punjab is Y2K compliant BANGALORE, April 14 (PTI) — Bank of Punjab Limited, using Bancs2000 from Infosys to automate all its operations, has achieved year 2000 compliance, meeting the March 31 deadline set by the RBI, according to an Infosys press release. Bank of Punjab had ‘migrated’ all its branches to the year 2000 ready version of Bancs2000 which had received year 2000 certification from the Information Technology Association of America (ITAA). The
‘migration’ process was managed by Bank of
Punjab’s IT team with support from Infosys, Girish
Vaidya, Senior Vice President and head of banking
business unit said. |
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NEW DELHI, April 14 (PTI) —Rating agency, Crisil has reaffirmed the highest ratings of ‘AAA’ to non-convertible debenture programmes of Reliance industries. Crisil has also
reaffirmed the P1 plus rating assigned to the
company’s Rs 16 billion short term debt programme,
the agency said in a statement here today. The ratings
reflect RIL’s dominant market position and cost
competitiveness in the domestic polymer and
fibre-intermediate industries. It said adding that the
ratings also factor in the company’s above-average
profitability, comfortable net-gearing level, comfortable
interest and debt coverage ratios and strong cash flows. |
Cement industry to grow by 10 per cent NEW DELHI, April 14 (UNI) — After hitting the lowest growth in the last five years, cement industry is likely to perk up to 10 per cent growth in the current fiscal, Mr Parthasarathy, Secretary General, Cement Manufacturers Association, said. “With 7,000 km of expressways and two million houses every year in the pipeline, cement sector is looking ahead for good times,” Mr Parathasarathy told UNI. The industry which is the fourth largest contributor of excise revenue is already showing signs of recovering with the last month of the 1998-99 fiscal showing the highest ever month-wise production — 8.7 million tonnes. “In fact, the January-March quarter of the last fiscal has been much better than its rest nine months in terms of growth in cement consumption,” he added. If March-June quarter of this fiscal too shows strong growth, the recovery signals would turn definite. “It could be possible only when the current political crisis blows over and the government rapidly sets in to take upon the promised infrastructure investments,” Mr Parathasarathy added. The construction of two
million houses every year alone would mean consumption of
8 MT of cement annually based on conservative estimates
of four tonnes per dwelling unit. Also, the Rs 28,000
crore worth road project connecting Kashmir to
Kanyakumari and Silchar to Saurashtra which is expected
to use concrete extensively will boost the demand for
cement significantly, the CMA Secretary General said. |
BEL records 1,205 crore sales turnover BANGALORE, April 14 (UNI) — Despite sanctions imposed on the country by the United States and some European countries, the public sector defence unit Bharat Electronics Limited (BEL) registered a sales turnover of Rs 1205 crore during 1998-99 and ended up with a profit of Rs 60 crore. According to the provisional results for the year, the company had also achieved a direct export of Rs 31.16 crores which was 25 per cent more than in the previous year. The company had been
under great stress during last year as it did not have
healthy executable order and three major units in
Bangalore, Hyderabad and Ghaziabad figuring in the US
entity list which resulted in the denial of even general
purpose components. During the later part of the year,
there had been passive sanctions from some of the
European countries, affecting certain onging projects
both at Bangalore and Ghaziabad units under technical
collaboration agreement. |
NEW DELHI: Massive price cuts saw a near 69 per cent surge in sales of Fiat Uno and over 41 per cent jump in retails of Maruti passenger cars during the first quarter of 1999 calendar year over the previous quarter even as players in the mid-size segment saw sales registering a further drop. During the period, sales in the entire passenger car industry grew by around 38 per cent having offloaded 1,09,595 units as against 79,454 units in the previous quarter, latest industry estimates said. Mitsubishi Lancer sales zipped ahead at 88.4 per cent to sell 1,781 units during the first quarter as against 945 units in the last quarter of 1998. Ind Auto Limited sales grew by 68.9 per cent during the period at 4,091 units from 2,421 units while Maruti’s passenger car sales surged ahead at 41.7 per cent at 81,988 units from 57,855 units in Q4 of 1998. Honda Siel cars registered a 48.4 per cent surge in sales of Honda City cars at 2,713 units from 1,828 units in the previous quarter, according to the estimates. Hindustan Motors and Hyundai Motors also recorded a growth in sales during the period. HM’s passenger car sales grew 10 per cent while Hyundai’s Santro sales grew by 8.9 per cent at 3,232 cars and 9,199 units respectively. Telco saw a major drop in sales of its Siera and Estate passenger vehicles during the period. Retails dropped by 57.2 per cent at 100 units from 234 units in the previous quarter. However, during the last two months of Q1,the company sold 2,100 units of its much-hyped Indica. Hero Honda CBZ NEW DELHI: Hero Honda Motors Limited’s maiden foray into the 100cc plus category — CBZ —hit the city streets on Tuesday. The first motorcycle was handed over to a customer at the Gurgaon dealership by Mr Brijmohan Lall Munjal, Chairman and Managing Director of Hero Honda. CBZ is available in two versions priced at Rs 54,800 (on-road in Delhi) for the variant with drum brakes and Rs 59,000 for the vehicle with disc brakes. The disc brake version would be optional and will be available on front wheel to reduce braking effort substantially. Kinetic HYDERABAD: The Kinetic Engineering Limited would launch its first motorcycle in October next. Kinetic has programmed to introduce its self-start scooterette and variants in the existing models to suit the needs of various consumers specially college boys and girls, the joint managing director of the Kinetic, Ms S.F. Motwani said. Motwani said Kinetic would enter the motorcycle segments with 100 CC and 120 CC four stroke motorbikes with over 65 kmph mileage. Kinetic has plans to produce 3,000 vehicles a month in the beginning, she said adding that it would cover entire two-wheeler range soon. TVS-Suzuki NEW DELHI: TVS-Suzuki Limited is planning to roll out seven new products during the 1999-2000 fiscal, including two new 150cc four-stroke bikes, to cross the 8.40 lakh units cumulative sales figure. Riding on these new launches, the company is confident of achieving a growth rate of over 20 per cent during the current fiscal, a statement said. Besides the two new
150cc motorcycles, the new models include fresh variants
of Shogun, Shaolin, a new look TVS-Scooty, a completely
new moped and the executive version of TVS-Spectra.
— Agencies |
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| Bridgestone CHANDIGARH, April 14 (TNS) — Bridgestone ACC India Limited has launched Donuts technology in India. The first Donuts-based product is Bridgestone B350 Pro radials. It is a frontline high performance passenger car tyre technology. Rally Yellow Pages Markets closed Quality control |
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