India’s most preferred private airline gets ICAO rap
Mumbai: Jet Airways, India’s most preferred private airline, has come under fire from the International Civil Aviation Organisation (ICAO), for discrepancies in its maintenance system. The system failures were pointed out after an ICAO safety audit, which keeps tabs on airlines worldwide to ensure that procedures are being followed, at the airlines maintenance facilities in April.

In Jet’s case, the infrastructure and environment for the wheel overhaul were found to be improper. The Director General of Civil Aviation (DGCA) has suspended the licence of the quality control officer of Airworks India, a Mumbai-based aircraft maintenance company, which carries out wheel overhaul for Jet.

All work on these components has been suspended. The DGCA has disallowed the use of the wheel bay till the facilities are improved. The airline has expanded to a fleet of 26 aircraft over the past few years. But maintenance infrastructure has not kept pace with the expansion, sources said, Despite a multi-million dollar fleet of the latest, new generation Boeing 737 aircraft, Jet has no hangar of its own for parking or maintaining the aircraft. Apparently, airline officials have been lobbying with the Airport Authority of India for some years trying get space and have finally succeeded in getting a place at Mumbai airport.

Quality control is sacrosanct in the aviation business because every system has to be fine tuned before it is approved as being air-worthy. The DGCA gives quality control approvals to engineers within the airlines, who are supposed to ensure that all the systems and procedures are according to the norm. "The specific problem in this case arose because the maintenance was being carried out by Airworks in the open air without adhering to proper procedures. The powers of the quality control officers in Jet Airways are also being re-evaluated to ensure compliance in the future.
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Ranbaxy plans to offer ESOPs at 25% discount
New Delhi : The board of directors of Indian pharma major, Ranbaxy Laboratories, today announced the introduction of an employee stock option scheme (Esop) with a view to rewarding and retaining its employees. The new scheme will also cover the company's international joint ventures and subsidiaries as well.

According to the ESOP proposal, the company plans to offer 25 lakh shares to some of its employees over the medium term (three years to four years) and in a phased manner. These shares will be offered at a discount not exceeding 25 per cent of the company's prevailing average market price over the last 30 days before the date of allotment.

The modalities of the stock option scheme will be finalised by the management committee of the company and a final proposal will subsequently be put up to the board for approval.

Last week, Ranbaxy entered into an agreement with Bayer AG to acquire its German generics business, estimated at $4m. This acquisition will provide the pharma major a vehicle to enter the German market, which is the third largest generics market in the world after the United States and the United Kingdom. The deal with Bayer did not involve the sale of any of the German major’s manufacturing facilities.
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Baron Electronics to shed its family owned image
Mumbai : Better known for its bold moves that transformed the audio and television markets, Baron Electronics, which has been largely identified with family man, Kabir Mulchandani, is planning to Shed its `family-run' image. Baron has appointed PricewaterhouseCoopers (PwC) for its management restructuring and also for formulating the worlds best accounting and HR practices, including attractive ESOP schemes, in line with globally accepted norms. The group has also decided to take part in the new economy and is eyeing a joint venture in the broadcasting and entertainment space with a separate initiative in the internet space.

It is said that the current, six-member, board is being increased to a eight-member board with Kabir Mulchandani taking the place of managing director (marketing) and looking after only the marketing operations. The board will have two additional directors who will head the group as managing director (operations) and managing director (finance). The group already has a nominee from Aiwa, Mr Noushi, on the board after the Japanese major took five per cent equity in the company early this year.

According to the company spokesperson, Baron has decided to focus on knowledge-based consumer access equipment including internet space, communications and entertainment products. It is believed that the transition to internationally accepted accounting practices and a forward-looking management structure, will help the company harness a ranking position in the new economy.

According to unconfirmed sources, Baron is also negotiating with JP Morgan Stanley and ISec for looking at its proposed IPO scheduled in the third quarter of this financial. The group expects to raise about Rs 100 crore through this issue.
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Ciba Specialty takes 51% in Diamond Dye-Chem
Mumbai :Ciba Specialty Chemicals has acquired a 51 per cent stake for an undisclosed sum in Diamond Dye-Chem, a leader in the stilbenic whitener segment accounting for nearly 90 per cent of the country’s exports. This acquisition is likely to result in the formation of a regional supply joint venture for the Asia-Pacific region. The joint venture will be Ciba Specialty’s key manufacturing base in both India and the Asia-Pacific. Besides, its proximity to the market which is expected to ensure shorter delivery time and quicker adjustments to market changes, this joint venture will give it the flexibility to offer a competitive product range.

According to Jyoti Maheshwari, managing director of Diamond Dye-Chem, this acquisition is a pro-active step for Ciba Specialty, which is a leader in the international whitener business. This move is bound to set a process of further consolidation in stilbene production. Mr Maheshwari will take over as the managing director of the joint venture, which will be operational from May 1.
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Volvo and Telco pledge support to IIET
Mumbai : The Indian Infrastructure Equipment Trust (IIET) -- a construction equipment bank, floated by Srei International Finance and the Construction Industry Development Council – has found support from Volvo India, Svedala Industrie and Telco Construction Equipment.

Sunil Kanoria, chairman & managing director, IIET, said the company has envisaged a paid up capital of Rs 100 crore. It has appointed the Boston Consultancy Group to draw up a business plan and appointed ICICI Securities to help the company place equity with institutions. It plans to purchase construction equipment on its own, besides sourcing idle machinery from contractors and deploying it with contractors who need them. IIET has also received a full maintenance contract from major equipment manufacturers.

The trust launched its pilot project recently -- it provided construction equipment worth $3m to the Tehri Hydro Electric Dam project. The equipment, sourced from Volvo and L&T Komatsu, has been lent to the project from its equipment bank.

The board of directors include Sarosh Ghandy, managing director, Telco Construction Equipment, Sudhir Srivastava, managing director, Svedala Industrie, Ravi Uppal, managing director, Volvo India, PK Bhattacharya, former deputy managing director, State Bank of India, KK Mohant, director, Srei International, and PR Swarup, director, CIDC.
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MTNL on schedule to launch mobile service, despite probe
New Delhi: Despite the probe ordered by the department of telecommunications into the purchase of infrastructure equipment from American multinational, Lucent Technologies, the state-owned Mahanagar Telephone Nigam (MTNL) states that its plans to provide cellular mobile services in Delhi and Mumbai will not be delayed. MTNL has plans to launch the services commercially by August. The soft launch will be in July.

A three member committee was set up by the DoT, last week, at the insistence of the Union communications minister Ramvilas Paswan, following the objections raised by some members of parliament (MPs), to probe into the bidding process followed by MTNL for the purchase of equipment. The three-member DoT panel consisting of the officials at the level of deputy director general (DDG) will give its report by next week.

According to Mr. S. Sundaresan, director (finance) of the company, MTNL is going ahead with the project and hopes to meet the deadline set by its board for the launch of the services. MTNL officials feel that the private operators of cellular services in metros want to delay its project and have instigated the probe.

MTNL invited bids for the supply of infrastructure equipment last year. Lucent, Motorola, Alcatel, Nortel and Ericsson were among the companies, which participated in the bids. ITI Lucent, a joint-venture between the Indian Telephone Industries (ITI) and Lucent, was awarded the contract under which, ITI will design, supply and install the network for MTNL and Lucent will supply the necessary equipment.
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Dutch, KPN, and Spanish, Telefonica, in talks to form a powerhouse
Amsterdam : KPN, the Netherlands’ leading telecom company, said on Saturday that it was in talks with Spanish giant, Telefonica, to create a joint venture that would boost the two carriers’ ability to buy competitors and gain costly third-generation mobile phone licences, analysts said on Monday. It is rumoured that the Spanish company would hold 60 per cent of the joint venture.

KPN, which was contemplating the floating of an IPO for KPN Mobile NV, Europe’s seventh largest mobile operator, said that it would delay the public offering in light of the talks with Telefonica. The IPO was set to raise as much as 10 billion euros.

Analysts predict that an alliance or merger would be good added value for both companies whose activities and ideas are similar. While KPN Mobile, with 8.5 million customers end March, is active in the middle and Eastern part of Europe, Telefonica has 20 million customers in Europe, Latin America and North Africa.
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Calcutta high court approves Shaw Wallace merger plans
Calcutta : The Calcutta High Court has okayed the move of Shaw Wallace & Company (SWC) to amalgamate three of its subsidiary investment/finance companies -- Ripon Finance Ltd, Jose Investments Ltd and Bankshall Investments Company Ltd -- with it. Accordingly, shareholders' meetings have been convened on May 12 to consider the amalgamation proposals.

Upon approval, all the liabilities, debts, obligations and duties of the transferor companies shall stand transferred to SWC and the carry-forward losses of the transferor companies, as per the audited accounts as on the transfer date, shall be adjusted against the reserves of SWC on amalgamation.

It is, however, stated that the scheme shall not in any manner affect the rights of any of the creditors of the transferor companies, in particular, the secured creditors who shall continue to enjoy and hold charge upon their respective securities.
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