FIs take control of MRL
New Delhi—Financial institutions, holding a 44 per cent stake in Modi Rubber, have more or less wrested control over the board during the last two months. They have replaced MRL chairman P Rai with Pandurang Rao.

Rao is the UTI representative and was formerly MD, State Bank of Hyderabad.
At present, the structure of the board is strongly tilted in favour of the FIs being headed by Rao, while other members include A C Ahuja (IFCI), P C Gupta, (GIC), M P Modi (LIC), apart from the promoters, B K and V K Modi, and a collaborator’s representative.
With growing animosity between the Modis and the FIs the former have stopped attending board meetings.

The board, headed by Rao, has started looking at the business valuation of the assets of the company as the FIs suspect that losses were shown by the promoters primarily in order to depress the share value, to lower the acquisition price.
The Takeover Code demands that the public offer should be equal to the six-monthly average of the quoted price of the scrip. The board is looking at the operations of the company to arrive at the true value of the share.
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Modis’ revised offer price of Rs 90 rejected by FIs
Mumbai--Financial institutions, the largest shareholders in Modi Rubber, rejected the revised offer price of Rs 90 from the Modi family and have yet again sought that Modis buy out their entire 44 per cent stake.

The promoters are unlikely to hike the offer size to accommodate the FI's wish as they had first made an offer for 35 per cent stake at Rs 80, then revised it to Rs 81.50 a share. The revision to Rs 90 per share announced yesterday came after the FIs demanded that the offer price was not as much as the promoters had earlier indicated.

The FIs had also threatened to make a counter open offer and take the management control of Modi Rubber.

Top FI sources said that in a meeting today between the promoters and FIs, the latter conveyed that they wanted an increase in the offer size.

This, however, was not acceptable to the promoters of the company. The Modis have now decided to go by a wait and watch approach.
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Citicorp Fin takes 49 percent stake in ATS services
New Delhi--Citicorp International Finance has taken a 49 per cent stake in a Delhi-based IT company ATS Services. After Citicorp’s stake acquisition, the foreign equity participation in the company will go up to 69.8 per cent.
Apart from Citicorp, Tandon Capital Offshore, Mauritius, is the other stakeholder in the company. Tandon Capital Offshore is a wholly-owned subsidiary of Libra Advisors LLC, US.
After Citicorp’s stake acquisition, Tandon’s stake has come down to 20.8 per cent from 49 per cent. Citicorp has been funding infotech companies for quite some time now, with the Bangalore-based financial products company, i-Flex, being among the notable companies in which Citicorp has acquired stake. Citicorp holds around 48.1 per cent stake in i-Flex.
ATS Services is engaged in providing a host of services, like tele-marketing services, direct mail information management services, fulfilment services, product marketing services, Net-based services and software development.
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CA shareholder alleges mismanagement; fights for control
New York-- Sam Wyly, a wealthy software pioneer from Texas who has sold two of his companies to Computer Associates International Inc, CA, is asking shareholders in a proxy vote to replace the company's board with his own team and himself as chairman. He alleges that the company has let its share price languish and mistreats its employees and customers.
Wyly— who analysts called a formidable threat to CA as he is an industry veteran with roots in the industry stretching back to the 1950s--said he could turn the company around.
Shares of CA remained almost unchanged yesterday, falling just 0.33 per cent, or 11 cents, to close at $33.69 on the New York Stock Exchange.
Computer Associates, which has 18,000 employees and yearly revenues just above $4 billion, said it was confident that Wyly's efforts would fail.
CA says that Wyly does not present a serious threat as his family investment group, Dallas-based Ranger Governance, owns about 2 million shares, less than 1 per cent of Computer Associates' stock. The group will try to persuade shareholders to approve its slate of board candidates at Computer Associates' August 29 annual meeting on Long Island.
Computer Associates was recently criticised in the press for switching over to a controversial accounting method, as well as its corporate culture — which executives have acknowledged can be adversarial to its customers.
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TCS, Carnegie Mellon U set up sofware industry centre
New Delhi—Tata Consultancy Services, in cooperation with Carnegie Mellon University of the US, has launched a software industry centre to study emerging trends in economics, management and technology for the software industry.
The centre, which will be set up at the Carnegie Mellon U, is a research facility staffed by a multi-disciplinary group of faculty and staff experts from Carnegie Mellon units, including a software engineering institute, a TCS statement said here.
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ITC has big plans for its retailing business
Chandigarh— The Lifestyle Retailing Business Division, LRBD, of ITC Limited has big plans for its branded lifestyle apparel store, Wills Sport.
The company plans to inject Rs 150 crore within the next 2-3 years and achieve a turnover of between Rs 250 crore and Rs 300 crore by the end of the third year of operations from sale of its branded premium range of apparels both for men and women, says ITC, LRBD chief executive, Sanjiv Keshava.
ITC has so far opened four exclusive premium stores called Wills Lifestyle, of which two are in Chennai and one each in New Delhi and Chandigarh.
The company plans to open a total of 100 stores by the end of third year of operations, says Keshava. While other brands under the range of lifestyle products that are in the pipeline will also be marketed under the Wills Lifestyle brand of stores the company by August 2001 is gearing its machinery to open 25 stores positioned in 23 cities.
The places where the stores are to be opened this month include Ambala, Trichy, Coimbatore, Connaught Place in New Delhi on June 26 and Pune on June 29.
In July stores would be opened in Aurangabad, Hyderabad, Vishakapatnam, Indore, Pondicherry and Bareilly while in August stores would be opened in Dehra Dun, Thiruvanthapuram and Kozhikode.
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Mahindra Realty, Gesco boards approve recast plan
Mumbai—The board of directors of Mahindra Realty & Infrastructure Developers, MRIDL, and Gesco on Friday approved the demerger of the realty and infrastructure businesses of MRIDL into Gesco.
According to the recast plan, shareholders of MRIDL, an unlisted wholly-owned company of Mahindra & Mahindra, will be issued 54 fully paid-up shares in Gesco for every 100 shares held. The demerger share entitlement ratio has been worked out by independent valuers NM Raiji and Kalyaniwalla & Mistry.
Following the demerger, which is subject to approval of the Bombay High Court, the Mahindra Group will increase its stake in Gesco to 59 per cent from 43.7 per cent, while the Sheths -- co-promoters -- will play second fiddle with a 15 per cent shareholding. At present, the Sheth family has a 20 per cent stake in Gesco.
The second stage of the recast plan will involve spin off of the infrastructure business into a separate subsidiary, where IFC Washington would pick up a 20 per cent stake for $10 million.

When the demerger becomes effective, the paid-up equity of Gesco Corporation will increase to Rs 39.50 crore from Rs 28.76 crore. The total asset set base will rise to Rs 422 crore.
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Daewoo says it will continue its Indian operations
New Delhi—Young Tae Cho, the new managing director and CEO of the beleaguered Daewoo Motor India, has dismissed fears that the company wants to shut down its Indian operations. Speaking to reporters, he said that India is a good market in terms of potential so why should the company close the plant. He added that the Matiz was still in demand so how can it close down.
The company has been in the news ever since its former MD and CEO Y C Kim announced his decision to quit the group last week and there has been widespread concern over what this change in leadership would entail and if some of the restructuring and turnaround strategies introduced by his predecessor would be continued by Cho.
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Indal devises five-pronged strategy to increase profits
Kolkata—The Aditya Birla group company, Indal has laid out a five-pronged plan to ensure higher profitability and better market position in the coming years.
President and CEO of Indal, S K Tamotia, said in a 'Management Discussion and Analysis Paper' that the first leg of the strategy would aim at improved presence of Hindalco-Indal combine in the downstream segment besides reaping the benefits from the latter's strength in alumina and the former's dominance in primary metal sectors.
The Paper also said that while ensuring better market position, the company would also make efforts to improve realisation and reduce costs.
He said that the second part of the strategy would be to focus on further improvements in asset utilisation across plant locations and that return on capital employed has already gone up from 11.8 per cent to 15.7 per cent while return on assets employed had simultaneously increased from 11.4 per cent to 14.5 per cent.
Tamotia said that the short-term priority for Indal would be to leverage benefits from upgraded mills at Belur and Taloja, while for the medium term, the idea was to concentrate on strategies to improve utilisation of physical assets.
Besides this, the company would also put emphasis on enriching the product-mix for improved revenues from existing assets.
Apart from the domestic market, the company would focus on the export market besides penetrating into new markets for alumina and downstream products.
Tamotia said that in the year 2000-01, the company's net turnover had risen 22.3 per cent at Rs 1283.3 crore and post-tax profit by 38 per cent at Rs 116 crore over the previous year.
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Tatas plan to restructure recession-hit firms
New Delhi—The Tatas are considering a major restructuring drive for their companies hit by recession and are aggressively pursuing growth plans for other ventures.
In an interview the Tata Sons chairman Ratan Tata said the restructuring would be sector-specific but declined to name the companies where the restructuring drive would be stepped up. However indications are that Telco figures among the list of companies where restructuring exercise would be carried out in the coming months.
Among other major group companies, Tata tea's income fell while Tisco overcame the recession in the industry. Other group companies like Tata Consultancy Services and Indian hotels continued to outperform other players in the industry.
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Commerzbank to get out of commercial banking in India
Mumbai—Commerzbank has decided to exit the commercial banking business in the country and is laying off 33 employees involved in this business. These account for 70 per cent of the bank's staff strength of 47 in India.
Commerzbank plans to retain only 14 employees, some of whom will be absorbed into the bank's network in Frankfurt and Singapore.
The average payout per employee will be Rs 9 lakh, amounting to a total outgo of Rs 2.97 crore. These employees will also receive retirement benefits from the bank.
Commerzbank, which has a single branch operation in India, will now focus on the areas of corporate finance and precious metals in India.
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Calling-party-pays regime opposed by BSNL
New Delhi--Bharat Sanchar Nigam Ltd (BSNL) has opposed moves to introduce calling party pays (CPP) system in the country. It says that some of the issues listed by the telecom regulator for consultation are no longer valid now.
Under the CPP regime, cellular mobile subscribers do not have to pay for incoming calls. Instead, a supplementary charge is levied on the party making the call and a share of this is passed on to the mobile operator.
Sources said that BSNL in its comments to the Telecom Regulatory Authority of India (Trai), has said that the incoming call rates have substantially reduced over the past few months. Hence the issue that cellular subscribers were not accepting incoming calls due to higher tariffs, is not valid in the current context. They added that subscribers were not attending incoming calls due to inconvenience in taking the call at a particular moment, rather than owing to high tariffs.

BSNL’s comment assumes significance as it is a major fixed player in the country and is likely be impacted significantly by future developments on the CPP issue.
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RPG group shelves plan to offload stake in MusicWorld
Kolkata--The RPG group has cancelled plans for offloading 25 per cent stake in MusicWorld, its retail music chain as the group failed to get a proper valuation for the stake, according to RPG Enterprises president and chief executive (retail sector) Raghu Pillai.

The group was in talks with financial institutions including ICICI, UTI and IL&FS to offload the stake. Group sources had earlier said that they were expecting around Rs 30 crore from the proposed sale.

The group was primarily looking to fund its expansion programme for MusicWorld through the stake sale. It was precisely for this reason that the RPG group was looking at a financial investor for MusicWorld.
Mr Pillai added that the expansion plans would now be funded through internal accruals including restructured debt.
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Future growth plans of HLL hinge on 30-power brands
Mumbai-- MS Banga, chairman, Hindustan Lever Ltd (HLL) said at the company’s 68th annual general meeting (AGM) held here on Friday, the company’s 30 national power brands will grow to contribute as much as 90 per cent to the company’s turnover, as against 80 per cent, previously.
At a court-convened extra-ordinary general meeting (EGM) also held on Friday, HLL shareholders cast their vote on the merger of International Bestfoods Ltd (IBL) and Aviance with HLL.
Mr Banga said that the company hopes to attain significant synergies as a means of common distribution and saving in overhead reduction costs as a benefit of the amalgamation. He, however, indicated that around 250 employees would be affected as a result of the merger of IBL with HLL.
Apart from this he said there would be no significant increase in funds allocated for IBL brands. The Knorr soups brand from IBL would get further exposure through technological innovations.
Elaborating on HLL’s products, Mr Banga said that premium soaps have registered a growth of 16 per cent last year despite being downgraded and sluggish in rural areas.
He said that the launch of its branded roti will be a time-consuming one as further improvement in the product is required. He also added that the company has initiated test marketing of mineral water to mark a foray.
On the decline in ice-cream sales, Mr Banga said that the business is expected to pick up in the next 1-2 years. He said that the losses of the ice-cream division have reduced.
Mr Banga, in his address to shareholders, called upon the creation of a free Common Indian Market for storage and movement foodgrains and urged that the role of FCI should be changed to that of an administer of the Futures and the Common Indian Market. He also suggested harmonising the various food laws, which often have contradictory requirements, and housing them under a single ministry.
Mr Banga also presented an action plan for a "food revolution" to sustain an accelerated agricultural growth which, in turn, will regenerate and sustain demand across the economy.
Mr Banga proposed a three-pronged strategy encompassing, Precision Farming to improve farm productivity within the current land-holding pattern, Creating a structure to facilitate growth of a vibrant food processing industry and p Identifying various enablers for the model to work.
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Cadila appeals against constraints on Penegra
New Delhi--Cadila Healthcare Ltd has appealed against the recent Delhi High Court order restraining it from marketing male impotence drug Penegra, following a petition by US drug major Pfizer Inc, the maker of Viagra.

The Delhi High Court in an ex parte injunction had restrained Cadila from selling Penegra after Pfizer alleged that Cadila, by adopting the trade name Penegra, was trying to pass off its product as Pfizer's Viagra.

Cadila says that it could not possibly pass Penegra as Viagra was not available in India and nor was Pfizer planning to introduce it in India in the near future.

The court today issued a notice to Pfizer, accepted by Pfizer's counsel, and the next date of hearing has been fixed for June 27. A related matter of Cipla's Siligra too is coming up for hearing on June 27.

The counsel for Cadila Healthcare, Rajiv Nayar, in submitted before justice Manmohan SarinNayar contended that Penegra had a wide reputation and goodwill in the Indian market and had a very high sales figure.

The only motive of Pfizer in moving the court could be to pre-empt others from entering into the male impotence drug segment in India, said Nayar.
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