The steel industry is agog with whispers that the Ministry has persuaded the National Mineral Development Corporation (NMDC) to hand over Bailadila Deposit 3 mines to a large private steel group (the Chairman’s latest statement to shareholders talks of developing this deposit). The Bailadila complex in the Bastar region possesses one of the world’s best grade of ore which is sulphur free and has over 66 per cent iron content. Industry sources say that this is not the first proposal to hand over Bailadila 3 to the private sector. In the past the mine had been promised to the Ispat group, but the plan probably fizzled out once it got into serious financial troubles. This time the Essar group is leading the race for bagging the mines, say sources.
Interestingly, the group has just announced plans to delist all its companies from Indian stock exchanges. This would create a piquant situation for those shareholders who have been hanging on to their investment in Essar companies throughout its rough patch when the shares traded at a miserable Rs 2 or so. If the company bags the mines after delisting, will the future profitability be factored into the exit price, now that public shareholders will be ejected from the company? One will have to watch how the situation develops and who finally bags the mines if they are transferred.
No more calls
Earlier this month, the Delhi Consumer Disputes Redressal Commission fined two banks and a mobile service provider a cool Rs 75 lakh (total) for pestering people with unsolicited telemarketing calls.
This exemplary fine has already had a salutary impact. Some entities such as ICICI Bank are revamping their entire Do Not Call (DNC) process to permit registration through a simple phone call. Reserve Bank of India (RBI) rules today require people who do not want market calls to register their phone number separately on every bank’s website. This is a tedious process and many people who hate market calls are not Internet savvy. ICICI Bank’s executive director V. Vaidyanathan says once the new system is in place any customer can simply call this number and ask not to be disturbed by marketing calls. These numbers will be stored in a “central black box”. Every direct selling agent will have to “wash” his database against that of the black box to eliminate those numbers that do not want to be disturbed. The bank hopes its initiative will drastically cut customer complaints about harassment due to marketing calls. If successful, this could well become the industry norm.
Competition and consumer pressure has ensured that almost every credit card issuer has stopped charging annual card fees. Not charging the fee means that banks lose money in the process of issuing credit cards, since the card costs a few hundred rupees and there are monthly account statements to be sent to cardholders. A majority of cardholders meticulously pay their outstanding bills on time and simply do not roll over their credit, so the issuer also earns no money on such cards for nearly two years. Rising interest rates have also dampened consumer enthusiasm and slowed the growth in new card issuance, say top officials of Citibank. Consequently, Citibank has decided to initiate a massive one-time clean up of accounts by closing out 50,000 cards. Many of these were customers who already wanted to close the card, but the bank wouldn’t oblige and tried to make them stay on. It has now decided this is bad strategy. It would rather close the card and separately try to woo the customer back. This has immediately led to a dramatic reduction in Citibank’s customer complaints.
For over a year now, Rajeev Sawhney, the non-resident Indian financier of vMoksha Technologies has been knocking the doors of every regulator to establish gross irregularities in a deal to sell vMoksha to Helios & Matheson (H&M) Information Technology. He alleges that Pawan Kumar, his partner and chief of Indian operations surreptitiously opened an account with State Bank of Mauritius in the name of vMoksha Technologies. The bank in turn opened this account with Pawan Kumar’s signature alone and also lent it $13.5 million (on 28 June 2005) that was swifly transferred to H&M. Sawhney says, if H&M bought vMoksha at $19 million, why was vMoksha transferring $13.5 million to it?
Sawhney’s complaints to the two national bourses and the market regulator have been ignored, but a criminal complaint filed with the Metropolitan magistrate’s court in Mumbai was admitted on 19 January and summons issued to State Bank of Mauritius officials, H&M and Pawan Kumar. This may finally solve the mystery of the alleged sale of Moksha to H&M before another litigation filed at Chennai winds its way through the legal system.
There was a time when politicians made news for borrowing the private jets from industrialists. This month, a political heavyweight from the South and his industrialist brother reportedly acquired two private jets at a cost of Rs 50 crore each. They are savvy businessman too, but being in power has given a turbo-boost to their business.