IDBI shortlists three consulting companies for restructuring
Mumbai: India’s leading development bank, the Industrial Development Bank of India (IDBI), which is trying to reinvent itself as a universal bank and also to refurbish its image among investors, has shortlisted three management consultants from which one will chosen to help it draw a road-map for the future.

IDBI has already set up a committee comprising six executive directors and chief general managers for steering this initiative, will soon be calling for financial bids from the shortlisted three and after a detailed evaluation decide on an ideal partner.

Currently, the market price of Industrial Development Bank of India scrip was hovering around Rs 35 per share against the initial public offer price of Rs 130 per share and there was little liquidity in the scrip, according to sources and added that this needed to be corrected to reflect the intrinsic worth of the share as well as to improve shareholder value.
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Citicorp buys out Motor and General Finance
New Delhi: The US-based Citicorp Group is planning to merge Citicorp Credit Services India with Citicorp Securities and Investment after buying out Motor and General Finance group’s stake in the former, in order to take advantage of the synergies in operations of the two companies.

CCSIL was a joint venture between the Delhi-based MGF and Citicorp, with the former holding 47.71 per cent equity and the latter a majority stake of 52.29 per cent. MGF is understood to be keen to exit the joint venture and has agreed to sell its entire holding comprising 9.54 lakh equity shares to Citicorp Overseas Investment Corporation.

CCSIL was set up to manage collection process, but subsequently extended its scope of activities to include call centres. It now plans to further expand its activities to provide IT-enabled transaction processing services in the area of banking and finance to Citicorp Group entities in India as also to third party customers.

The Foreign Investment Promotion Board has cleared Citicorp proposal to buy out its local partner in CCSIL, though the department of economic affairs sought more time to examine the case.
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Reinsurance guidelines for life insurance firms soon
New Delhi: According to the chairman of the Insurance Regulatory and Development Authority (IRDA), Mr. N Rangachary, the government would soon come up with reinsurance norms for life insurance companies.

He said that the regulatory authority would soon come up with 4-5 clauses pertaining to reinsurance of policies by life insurance companies within a week's time. The new norms would lay down rules for life insurance companies registering with the regulator to reinsure a portion of their policies with companies handling exclusively reinsurance business in a bid to reduce their risk. Till now, the country's only Life Insurance Corporation (LIC) reinsures a portion of its assets with General Insurance Corporation (GIC) and also with Switzerland-based reinsurer Swiss Re.

The chief regulator believes that the prices of insurance policies is expected to come down considering the interest of the public with increasing number of companies applying for insurance license.

Till date, seven companies have applied for insurance - Dabur-Allstate, Prudential-ICICI, Reliance Industries and HDFC-Standard Life, Sundaram Royal & Sunalliance, Max India-New York Life and Kotak Mahindra-Old Mutual.
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Key antitrust official resigns
Brussels: Citing lack of willingness by the EU's executive to pursue important reforms to its merger review process, Mr. John Temple-Lang, a top-ranking official at the European Commission's antitrust department has resigned from the department.

According to him, the EU's competition department had no will to introduce reforms that would ensure companies were given a fairer hearing when deals were scrutinised by the EU.

There has been considerable pressure from companies and their lawyers for the Commission to make its merger review process more accountable. The Commission has the final say on all deals over a certain size in the EU and also leads high-profile investigations into anti-competitive behaviour such as price-fixing cartels. Earlier this year, it vetoed the big merger between US telecommunications companies Worldcom and Sprint
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Spain may rethink its 3G strategy
Madrid: Under political pressure for "giving away" third-generation mobile telephone licenses in March, the Spanish government may sell additional 3G licenses. It is also said to be studying whether to levy additional charges on the winners of the March contest.

It announced that the second round of allotting 3G licenses with higher levies might be initiated next month, when the Science and Technology ministry unveils new measures to encourage more competition within the telecommunications industry.

The government hopes that this second round of licensing with higher levies will placate critics who accuse the Spanish government of missing out on windfall revenues from the auction of 3G licenses elsewhere in Europe.

The present holders of 3G licenses, meanwhile, are furious at the prospect of being forced to pay additional levies. The beauty contest in March, they say, commits them to a punishing investment schedule and the introduction of UMTS services, which allow mobile phones to access the internet, in 23 Spanish cities by August 2001.

Despite cries from Spain's opposition Socialists to nullify the March contest results in order to allow a new auction, at a press conference on Friday, Spanish prime minister said the 3G licenses would not be revoked.
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VW considers China buyout
Frankfurt: Volkswagen, Europe's largest automaker and a leading example of Sino-foreign joint ventures in China, is said to be considering buying out its state-owned Chinese partners in their jointly-held car plants once China joins the World Trade Organisation. According to a board member, the company is looking at ways to take full control of its joint venture, Shanghai Volkswagen. Volkswagen accounts for over 50 per cent of the Chinese passenger car market.

Despite the fact that this is likely to have far-reaching political and commercial repercussions in China, such a step would help ensure greater flexibility in the German manufacturer's choice of suppliers and ultimately improve its locally-made cars. Chinese parts makers have yet to reach international industry standards.

Volkswagen’s attempts highlight foreign carmakers' struggle to boost their quality ahead of China's WTO entry. Manufacturers hope that once this happens, locally built cars will compete directly with foreign-made imports. Following China's entry, import tariffs will fall from 80-100 per cent to 25 per cent in July 2006, according to terms already agreed in accession negotiations.

China's entry into the WTO poses a double-edged sword for Volkswagen. While it becomes more flexible to import parts and export over-capacities to neighbouring countries, it will lose market share as imported cars become more affordable.
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