PSU, telecom decisions draw support
NEW DELHI, July 7 — The industry today welcomed the government’s decision to approve the target of disinvestment of Public Sector Undertakings of Rs 10,000 crore for the current fiscal.

• Revenue-sharing plan— who doesn’t want?

Archies net profit shoots up 83 per cent
NEW DELHI: Archies Greetings and Gifts has recorded an 83 per cent jump in its net profits.

Aid for soldiers
NEW DELHI, July 7 — The Indian pharmaceutical sector has committed over Rs 2 crore in assistance to the soliders affected in the Kargil action. — Rs 1 crore in cash and Rs 1 crore worth of medicines.

Leftists plan ‘protest day’
NEW DELHI, July 7 — The CPI and CPM today criticised the government for taking major policy decisions like divesting stakes of big public sector units such as MTNL, VSNL GAIL and IOC and said it was a violation of the basic norms of a caretaker government’s functioning.

Gold crashes on Britain bank auction
NEW DELHI, July 7 — Gold prices crashed on the bullion market today following stockists selling in the absence of local customers after the gold auction by U.K. Bank and closed with notable losses.

Polluting units to be moved out of Delhi
NEW DELHI, July 7 — Polluting industries will be moved out of the Capital and relocated in the National Capital Region, the Delhi Government announced here today.

RBI allows banks to do interest rate swaps

MUMBAI, July 7 (UNI) — The RBI today allowed all scheduled commercial banks, primary dealers and all india financial institutions to undertake forward rate agreements (FRAs) or interest rate swaps (IRS) as a product for their own balance sheet management and for market making purposes.

In a circular the RBI suggested that the banks and institutions should ensure availability of appropriate infrastructure facilities and risk management systems at the opeation levels before undertaking such market making activity.

The participants should also set up sound internal control system whereby a clear functional separation of trading, settlement, monitoring and control and accounting activities is provided.

Announcing the guidelines for FRAs and IRS, the RBI excluded the regional rural banks to undertake such operations.

Banks and financial institutions are required to maintain capital adequacy for FRAs and IRS as per the original maturity periods multiplied by the conversion factors and the risk weightage alloted to the relevant counterparty. This resulted a minimum capital ratio of 20 per cent for all banks and financial institutions and 100 per cent for all other except governments. There will be no restriction on the minimum or maximum size of “notional principal” amounts of FRAs and IRS. Norms with regard to size are expected to emerge in the market with the development of the product. There will be no restriction on the minimum or maximum tenor of the FRAs and IRS.

The RBI emphasised that banks, institutions and primary dealers have to arrive at the credit equivalent amount for the purposes of reckoning exposure to a counterparty. For this purpose, participants may apply the conversion method and the exposure should be within sub-limit to be fixed for FRAs and IRS to corporates, banks, financial institutions and primary dealers by the participants concerned.

Further while dealing with corporates, banks, financial institutions and primary dealers should exercise due diligence to ensure that corporates are undertaking FRAs and IRS only for hedging their own rupee balance sheet exposures. Banks, institutions and primary dealers are advised to obtain a certificate from the authorised signatories of corporates to the effect that the transactions undertaken by them are meant for hedging balance sheet exposures only.

PSU, telecom decisions draw support
May not revive primary market
Tribune News Service

NEW DELHI, July 7 — The industry today welcomed the government’s decision to approve the target of disinvestment of Public Sector Undertakings (PSUs) of Rs 10,000 crore for the current fiscal.

Assocham, President K.P. Singh said that the government’s decision displays its commitment to fiscal correction and macro-balancing.

It would send positive signals and thus help create conditions for imparting stability in interest rates and prudent fiscal management.

The Union Cabinet yesterday approved the Rs 10,000 crore disinvestment programme for the current fiscal and decided to dilute stakes in nine PSUs including MTNL, VSNL, GAIL and IOC.

This will help the government raise Rs 10,000 crore during the current financial year and the decisions of the Union Cabinet are based on the recommendations of the Disinvestment Commission.

The CII said the fundamentals of the economy were strong and favourable and the environment positive and conducive for growth. The time was, therefore, opportunate for speedy implementation of the disinvestment programme, it added.

The government decision is unlikely to revive domestic primary market, leading stock brokers and experts said today.

“Disinvestment by government in public sector companies will not have impact on the primary market as these issues are not a regular feature and are completely different from issues offered by companies in the primary markets,” Dutt Stock Broking, Chief Executive Ashu Dutt told PTI.

“Disinvestment is not the solution for reviving the primary market as investors might not come back to the market after subscribing to the shares of public sector companies,” former SEBI member and Director, Society for Capital Market Research and Development, L.C. Gupta said.

Revenue-sharing plan— who doesn’t want?
Tribune News Service, UNI

NEW DELHI, July 7 — The telecom industry and business chambers today welcomed the government’s decision to allow private operators to move from the licence regime to a revenue-sharing formula.

“The Cabinet’s decision has vindicated the industry’s stand that the transition is legally tenable,” said the CII in a statement. The move will improve the country’s image and investor confidence which would also have a demostrative effect on other sectors of the economy.

However, the CII said, the next steps should be corporatisation of DoT. An executive directive should be issued to separate its functions of policy making and service providing.

Assocham said the decision will send positive signals to domestic and foreign investors. “It is a bold political intervention in a situation where the system was unable to find solutions to the problems of a beleaguered industry,” said Assocham President K.P. Singh.

Mr P.K. Sandell, Chairman of Assocham’s telecom committee, expressed the hope that the Cabinet would now correct inadequacies in the management of the privatisation process practised so far by the DoT.

All charges, which private operators have to pay whether for spectrum or connectivity and value-added services imposed by DoT have been based on the principle that their monetary gains must be maximised irrespective of whether market conditions warrant the high rates, Mr Sandell added.

“It was a good bold initiative”, the Managing Director of Mobilink, Mr Pravin Kumar, told The Tribune. The telecom package approved by the Union Cabinet yesterday met one of the major demands of the telecom operators — a move to a revenue-sharing arrangement from the existing system of a fixed licence fee.

The telecom operators were complaining of a severe financial crisis owing primarily due to the lower than projected revenue generation.

As of June 30, the telecom operators had to pay outstanding dues of Rs 3,800 crore to the government.

Mr Kumar said that more investment is likely to come into the telecom sector as a result of this decision, especially the paging industry.

“Earlier, investors did not get attracted to invest in the paging services alone as not many people seemed to be interested in investing only $ 10 million. Now, however, the whole scenario would change as overall investment in the telecom sector would increase significantly”, he said adding that the world over paging services have grown over basic and mobile services.

The bailout package, which allows migration of paging and value-added services, apart from basic and cellular service providers to a revenue sharing arrangement from August 1, 1999, is however, unlikely to have a signigicant effect on the city paging services.

Archies net profit shoots up 83 per cent

NEW DELHI: Archies Greetings and Gifts has recorded an 83 per cent jump in its net profits for the first quarter of the current fiscal at Rs 1.98 crore. This is compared to Rs 1.08 crore recorded in first quarter of the previous fiscal, the company said in a statement here on Wednesday.

The company has also announced a bonus issue in the ratio of 1:1 and September 15 has been fixed as the record date for getting the bonus shares.

Ranbaxy to target Latin America

Ranbaxy Laboratories Ltd will target Latin American states, including Brazil and Argentina, to expand its presence in the international pharmaceutical market, Chairman Tejinder Khanna said in Delhi on Wednesday.

After having entrenched iteself in North America, Europe, China and East Asia, Rabaxy will concentrate on the Latin American markets, besides New Zealand and Australia, Khanna told newsmen on the sidelines of the Asia-Pacific Forum on Intellectual Property Rights (IPR).

He did not rule out the possibility of having a pharma manufacturing facility in some Latin American nation at a later date.

Apollo Tyres lifts lockout

Apollo Tyres Limited (ATL) on Wednesday announced recommencement of operations at its Baroda plant having lifted the 50-day-long lockout at the unit after an agreement was reached between the management and workers. The plant had been under a lockout since May 28, 1999. The agreement encompasses issues such as shop floor discipline, enhancement of productivity and efficiency and the resultant increase in compensation.

Making a departure from the usual industry norm of a three-year wage settlement, the agreement will span a four-year period commencing January 1, 1999.

MRTPC penalises Essar Steel

The monopolies and Restrictive Trade Practices Commission (MRTPC) has penalised Essar Steel Ltd for indulging in unfair trade practices on account of misplacement and late delivery of debenture certificates.

Awarding a compensation of Rs 1,000 for loss of interest on delayed payments of interest and dividend, the commission said mailing debenture certificates at the wrong address and consequent delay in sending interest and dividend payments amounted to deficiency in service.

Subex public issue

Bangalore based software firm, Subex Systems Limited today announced its forthcoming public issue of 9.71 lakh equity shares totalling Rs 7.28 crore to finance its expansion of its software base in Bangalore and setting up a subsidiary in the USA.

The 9.71 lakh equity shares of Rs 10 each of the firm would be issued at a premium of Rs 65 per share. The issue will open on July 19 and will close on July 23.

ICI ties up with Orica

CALCUTTA: ICI India Limited has decided to tie up with Orica Limited, the largest chemical company of Australia, by setting up a joint venture company (JVC) in India to pep up its bulk and packaged explosives business.

ICI India would hold 51 per cent of the equity share capital in the JVC and would also have a majority representation on the board, including the positions of Chairman and the Managing Director, Company Secretary Ajit Yadav said.

Mahindras set up institute

Mumbai: Mahindra Information Technology Services Ltd (MITS), which spearheads infotech initiatives of the Mahindra group, has set up a software institute in association with Carnegie Mellon University (CMU), Pittsburgh, USA.

The recently set up Mahindra Institute of Software Engineering and Management will offer one-year, full-time course from September next to fulfil the requirements of well-trained software professionals of the Indian infotech industry, MITS said in a statement. — Agencies, TNS

Aid for soldiers
Tribune News Service

NEW DELHI, July 7 — The Indian pharmaceutical sector has committed over Rs 2 crore in assistance to the soliders affected in the Kargil action. — Rs 1 crore in cash and Rs 1 crore worth of medicines.

This assurance was given to the Union Minister for Chemicals and Fertilisers, Mr S.S. Barnala, by representatives of the Indian Drug Manufacturers Association (IDMA). As a beginning, the IDMA representatives handed over to Mr Barnala cheques to the tune of Rs 30 lakh and two token boxes of medicines.

PATIALA: The staff of Bank of Punjab, The Mall, has donated two days salary towards this fund. In a separate release, PSEB Officers (Accounts) Association announced that every officer of accounts cadre would donate one day’s basic pay for the welfare of families of army personnel.

Leftists plan ‘protest day’

NEW DELHI, July 7 (TNS and PTI) — The CPI and CPM today criticised the government for taking major policy decisions like divesting stakes of big public sector units such as MTNL, VSNL GAIL and IOC and said it was a violation of the basic norms of a caretaker government’s functioning.

“Such policy decisions are totally unacceptable politically and constitutionally,” the parties said in a statement and added that they would observe July 16 as a nationwide “protest day” against these decisions.

The Cabinet decision taken regarding the change in the telecom policy towards private companies, large-scale disinvestment of major public sector units and opening up of radio network to private operators will have adverse impact on the people and the country, the statement said.

The parties said that the telecom policy had been placed in Parliament for approval and the changes were illegal as the new policy had not been placed before Parliament.

“The BJP-led government has given these illegal concessions to big business with an eye to the elections. There is a big scam with kickbacks involved after the removal of Jagmohan as minister for communications,’’ the statement alleged.

The Cabinet decision regarding disinvestment of public sector units (PSUs) and auction of 50 radio broadcasting slots were outside the purview of a caretaker government.

Gold crashes on Britain bank auction

NEW DELHI, July 7 (PTI) — Gold prices crashed on the bullion market today following stockists selling in the absence of local customers after the gold auction by U.K. Bank and closed with notable losses.

A further fall in its prices is expected in next few days and prices might test the level of $ 250 an ounce.

Gold prices shot up in January following a rise in import duty by Rs 250 per 10 gram in January. Displayed a reversed trend after U.K. Treasury Bank announced its gold auction and receded to old low levels.

Standard gold and ornaments nosedived by Rs 80 each at Rs 4020 and Rs 3870 per 10 gram respectively. Sovereign also moved down by Rs 25 at Rs 3650 per piece of eight gram.

Silver .999 (ready) dropped by Rs 120 at Rs 7830 per kilo and weekly delivery by Rs 130 at Rs 7830 per kilo.

Polluting units to be moved out of Delhi
Tribune News Service

NEW DELHI, July 7 — Polluting industries will be moved out of the Capital and relocated in the National Capital Region (NCR), the Delhi Government announced here today.

Addressing a press conference here today, Delhi Industry Minister Narender Nath and Environment Minister A.K. Walia told a joint press conference that all industries in Delhi have been categorised as red, orange and red.

The industries in the red category due to their hazardous nature of pollution will not be permitted to operate in the city at any cost. Nath said “a comprehensive survey is being made to identify and shut them”.

He said out of an estimated 1.5 lakh industries in the Capital, hardly 52,000 of them have applied for reallocation of licences with “proper categorisation”.

Mount Shivalik
CHANDIGARH, July 7 (TNS) — The Mount Shivalik group has entered into an agreement with Stroh Brewery Company of the USA to manufacture and market Stroh beer brands in India. The company also plans to introduce Stroh’s Draught beer soon in Chandigarh and Delhi markets.

Radicura Ind
CHANDIGARH, July 7 (TNS) — The manufacturer of Ayurvedic medicines Radicura Medichem Industries, has planned to launch 20 Ayurvedic products shortly for the ailment of asthma, skin diseases, jaundice etc. The company is placed in category of pharmaceuticals and allied products in healthcare sector.