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Your money is safe, FM assures
Oil cos allowed some freedom on prices
Chronic defaulters mapped
Auto Scene
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Corporate News
Graphic: India's Tea Exports
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Your money is safe, FM assures GTB depositors New Delhi, July 26 Emphasising that the depositors’ money was reasonably safe, Mr Chidambaram said it was for this reason that a three-month moratorium was slapped on the GTB by the Reserve Bank of India, which was a wise and a prudent decision. Speaking after a meeting of the Cabinet Committee on Economic Affairs here today, the Finance Minister noted that the GTB’s downturn had started during the tenure of the previous BJP-led NDA government. He felt “may be not enough vigilance was maintained in the past.” He maintained the present UPA government will ensure greater vigilance and safeguard the interests of all depositors. Mr Chidambaram was categorical that there was no need to panic and the “RBI is keeping a strict vigil on the accounts of both public and private sector banks.” “We have taken cognisance of the situation and the apex bank’s moratorium on the functioning of the GTB for three months. I believe the depositors money is reasonably safe,” he observed. The intervention had become necessary after successive attempts over the past two years to the revive the GTB had failed to produce concrete results. It has been an unusually hectic weekend for Mr Chidambaram and his ministry as well as for the RBI and market regulator — the Securities and Exchange Board of India (SEBI). Asked whether the government was thinking of tightening the entry norms for private banks, Banking Secretary N S Sisodia said, “entry norms will be calibrated depending upon the situation.” Meanwhile, SEBI chairman G.N. Bajpai comforted the stunned depositors in Mumbai that the situation was well under control and did not warrant any panic reaction. “There is no problem of settlement and the stock market will function normally,” Mr Bajpai said. He pointed out that SEBI had reviewed the situation during the last two days and asked the National Stock Exchange and the Bombay Stock Exchange not to “dislevel” terminals of the brokers who had furnished their deposits with GTB as guarantees. SEBI has also assured close monitoring of the bank’s scrip to prevent manipulation. SEBI General Manager S. Ravindran said the moratorium is a corporate development and the market would react to it but the regulator would closely monitor the bank scrip to prevent any manipulation. He said the bank was a clearing agent for BSE only and the number of brokers who had pledged payment through the bank was few and the amount insignificant. “It is only around Rs 1 crore and the brokers would have to make alternative arrangements for the payments,” Mr Ravindran said. On the issue of GTB’s merger with the Oriental Bank of Commerce, its chairman B.D. Narang said here they were in touch with the RBI and moving fast in the matter. He emphasised the stakeholders interests would be protected.
Oriental Bank of Commerce, which would take over financially-troubled Global Trust Bank (GTB) soon, today said it expects to turnaround the Hyderabad-based bank within a year. “I hope to turn it (GTB) around in a year’s time,” OBC chairman B.D. Narang said here. Stressing that the GTB ‘suited it’ because of synergies, Mr Narang said the weakness of the bank has been the bad assets and strength of the OBC was recovery. According to estimates, GTB had net non-performing assets of as high as 19 per cent of the net advances. “If I am able to recover at least 40 per cent of their (GTB) NPAs, then networth becomes positive,” he said. Mr Narang said it would take about six weeks to complete the due diligence for the merger. He said since the GTB is a South-based bank, it would give the OBC the much-needed edge in the southern part of the country. Moreover, both the banks have a common core banking solution, Finnacle, he said, adding that consolidation was no issue. There would be no swap arrangement for GTB shareholders when it is amalgamated with OBC. Asked whether the OBC got the GTB for cheap, especially since there was no swap, Narang said “OBC shareholders have reasons for celebrations.”
— PTI
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Recover tax arrears, says PC New Delhi, July 26 Addressing the annual conference of chief commissioners and directors-general of income tax here today, the Finance Minister warned the errant tax officials of severest punitive actions against whom complaints have been lodged. Concerned over a whopping Rs 87,675 crore of direct tax arrears, he said, a sizeable amount of it was undisputed and recoverable. Promising an action plan, Mr Chidambaram said the government wanted to put in place a proper procedure at the Chief Commissioner and Income Tax Appellate Tribunal levels to collect a tidy sum of about Rs 7,000-8,000 crore which was easily recoverable. The Finance Minister said he would approach the Chief Justice of India and Chief Justices of high courts to take up big tax cases quickly. The government also proposes to come up with a media campaign as part of the multi-pronged approach to recover arrears. A three-stage approach would be adopted — the tax authorities would first issue notices to companies and individuals who have not cleared arrears. Then they would be called. And if that does not work, taxmen would go after them, he said. Mr Chidambaram wondered how a large number of people buying airline tickets, luxury cars and expensive watches worth lakhs of rupees were still out of the tax net. He asked the taxmen to look into the “life-style expenditures” and trace those transactions to find potential non-salaried taxpayers. He said the number of cars was far more than the number of people paying taxes. Moreover, there had been a spurt in the number of people owning high-end cars costing Rs 5 lakh or more. Even the number of people buying executive class airline tickets were growing fast, he said, adding that a large section of these people was still out of the tax net. It is not the salaried class that posed any problem as it is already in the tax net, Mr Chidambaram said. The concern was with a growing section of non-salaried class, which was enjoying all luxuries of life and yet not paying taxes, he added.
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Oil cos allowed some freedom on prices New Delhi, July 26 The decision was taken at the meeting of the Cabinet Committee on Economic Affairs (CCEA). It is likely to protect the interests of national oil companies against fluctuations in global crude prices. Talking to reporters after the CCEA meeting, Petroleum Minister Mani Shankar Aiyar, said, “A ceiling and floor price within a range of 10 per cent of the three-month average would be set, within which oil companies would have the freedom to revise prices every fortnight.” If this price band is breached, the oil companies would have to consult the government, he added. As per the decision, a mean of three-month moving average and one-year average will determine the retail prices. A band of 10 per cent on both sides has been permitted to oil companies and they can revise prices every fortnight, if the new prices are within the range. “In the event of prices moving beyond the band, oil marketing companies have to approach to the government,” Mr Aiyar said. The officials said under the new mechanism, prices should not increase or decrease beyond 50 paise per liter every fortnight, even if prices in international market rose sharply. The decision to introduce price band scheme will promote competition amongst oil marketing companies. Since the private players in the oil sector have yet to establish their market outlets, the decision would create competition among the public sector oil companies. They would be able to fix petrol and diesel prices without any consultation with the Ministry, said an official in the Ministry of Petroleum and Natural Gas. If the retail prices are on lower side in the band of average mean, they could increase prices and if they were on the higher side, they would have to decrease prices.
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Chronic defaulters mapped Chandigarh, July 26 According to a press note issued here today, the company has formed special squads consisting of enlisted lawyers, retired police officers and company officials dealing with such cases to track down the defaulters. It has also chipped in evidence-gathering operations. As part of this clean-up process, the company has served legal notices on several chronic defaulters who have availed themselves of RIM services and piled up huge bills despite repeated reminders. However, the company officials are serious about the recoveries and have mapped the defaulters, zeroed in on wilful defaulters, hence they will have no option but to pay. To be sure of its fact, the company has collected relevant information pertaining to the address, frequently-called numbers and address of the defaulters. This would help them track down the user anywhere in India.
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Auto Scene
New Delhi, July 26 Turnover of the company grew by 23.7 per cent at Rs 2,515 crore against Rs 2,033 crore during the first quarter of the previous year.
Bajaj Auto
Two-wheeler major Bajaj Auto today said the sales of its recently-introduced bike — CT 100 — has crossed the one-lakh mark within a three-month period of its launch. Following the sales surge in 81 days, the company has further ramped up production to meet the current demand and ensure ‘no stock out’ at dealership points. “Besides, we will also enhance production levels to meet the demand for the next season starting from October,” Bajaj vice-president (Business Development and Marketing) R.L. Ravichandran said in a statement.
Kinetic Nova 135
Kinetic Motors today launched the first powerful gearless scooter in the country - the Kinetic Nova 135. The Nova 135 features a 135cc 8.5 bhp engine. Commenting upon the simultaneous launch of the scooter at Bangalore and Ahmedabad, GM Marketing Ajinkya Firodia said: “It’s a matter of pride and joy for us to offer the Nova 135 to the consumer. With this, I think we will usher in a new era among gearless scooters, as a truly powerful and smooth scooter has never been launched before in India.” The scooter is priced aggressively at Rs. 36,660 ex-showroom — comparable to the price of other 100 cc scooters.
— TNS, UNI
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Corporate News
New Delhi, July 26 The company said turnover during the period increased by 15.6 per cent from Rs 247.5 crore to Rs 286 crore. Dabur India (consolidated), which includes the financial figures of DIL, Dabur International Ltd, Dabur Nepal Pvt Ltd, other subsidiaries and exports from India, posted an increase of 98.8 per cent in net profit, which touched Rs 22.1 crore, against Rs 11.1 crore in the quarter ended June 30 last year. The overall turnover of the group increased by 22 per cent in the April-June 2004 at Rs 344.4 crore against Rs 282.5 crore in the corresponding quarter last year. Meanwhile, the company plans to introduce Employee Stock Option Plan for which it would earmark up to five per cent of the paid-up share capital. The issue would be considered in its Annual General meeting scheduled to be held here today on July 28. Raymond
Textiles major Raymond Ltd has posted a lower net profit at Rs 3.14 crore in the first quarter ended June 30, 2004, compared to Rs 20.92 crore posted during the year ago period. The company’s total income (net of excise) rose to Rs 207.38 crore during the quarter under review, as against Rs 188.23 crore in Q1 last fiscal, Raymond informed the Bombay Stock Exchange today.
Cadila
Pharma major Cadila Healthcare Ltd has reported a 21 per cent increase in net profit at Rs 32.80 crore in the quarter ended June 30, 2004, as compared to Rs 27.17 crore in the year-ago period. Total income increased from Rs 271.15 crore in the April-June quarter of this fiscal to Rs 308.55 crore in the same period last year, Cadila said here today. The Cadila Group has posted a net profit of Rs 34.9 crore in the first three months of the current fiscal against Rs 30.36 crore in the corresponding period a year ago while its total income has risen to Rs 338.3 crore in Q1 from Rs 297.8 crore.
Hindware
Hindustan Sanitaryware and Industries Ltd (Hindware) today said its net profit for the first quarter of 2004-05 has surged 60 per cent at Rs 2.33 crore over Rs 1.46 crore in the corresponding period last year. Its gross profit during the period also increased by 27 per cent to Rs 9.02 crore from Rs 7.08 crore, while its revenue grew marginally by 9.3 per cent to Rs 69.91 crore. The company said earnings per share for the quarter ended June 30, 2004 went up to Rs 2.08 from Rs 1.30 in the year-ago period.
GNFC
GNFC (Gujarat Narmada Fertilisers Ltd), a fertilisers and chemicals company, has for the first quarter ended June 30 2004 posted net sales turnover of Rs 265.59
crore. It was Rs. 300.69 crore during the previous period. This 12 per cent drop is mainly attributable to lower product availability on account of a longer plant shutdown period of 26 days and also due to lower volume trading turnover of Rs 1.9 crore. —
TNS, Agencies
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