At the end of this month, M. Damodaran, who held charge as chairman of the Industrial Development Bank of India (IDBI) will demit office. The National Democratic Alliance (NDA) government, having appointed him for a five-year term, truncated his tenure to May. The grapevine has it that this move is linked to the takeover battle for Enron’s Dabhol Power Company (DPC) which is up for grabs. Perhaps, some interests fear that Damodaran may not see eye-to-eye with them. So, Damodaran will soon go back to only holding charge of Unit Trust of India, which he turned around and also did the unthinkable by returning the government’s bailout money while still leaving some shares in the kitty for it to book a future profit.
UTI’s future now depends on the new government’s economic policies. IDBI, on the other hand, will continue to grapple with the unsettled issue of Enron’s power project. Although it has finally provided for its exposure to two phases of the DPC project this fiscal, its provisioning requirement for a host of bad loans is estimated at Rs 7,060 crore until 2007. This means that unless the new government offers IDBI some sort of a bailout package in order to meet statutory reserve requirements prescribed by the Reserve Bank, only a brave heart would want to take on the burden of heading it.
While India’s Internet- savvy is taking away well-paid jobs from the developed world, Indians continue to struggle for a decent access to the WorldWideWeb. For instance, those who use VSNL’s e-mail are still harried that over 90 pc of its messages are Spam mail. Tata Indicom, which owns VSNL writes long replies to agitated customers explaining the long list of actions it has taken to introduce effective Spam filters. If Yahoo! and Hotmail are way ahead of VSNL in blocking Spam, then India’s information technology prowess seems a tad overrated. Similarly, a Pune-based user of the Reliance telephone has another problem. All of a sudden he found that the infocom company had blocked access to all Yahoo Groups over a week ago.
After several automated replies and a letter to the chairman, he finally received a response. It refused to admit there was problem and suggested that the subscriber should try connecting again. Here is what he wrote to the company, Your E-mail time stamp is 3.07 pm, May 11, 2004. On reading your mail I immediately tried to access Yahoo Groups through my Reliance FWP and lo and behold, just as Moses parted the sea, the site opened up in all its glory. Coincidence? I don’t think so.’’ We don’t either. Obviously the company has to learn that customer service sometimes includes admitting a problem. In fact, our sources inside the company say that Yahoo Groups were indeed blocked for a while due to a virus scare.
Corporate India is on such an aircraft-buying spree, that we may soon have traffic jams in the sky. A large corporate group, whose loans have been restructured and written off several times by Indian banks and financial institutions, has recently acquired two, fancy Gulf Stream jets for a hefty $70 million each. These aircraft are in addition to several others that the group already owns. Isn’t it worried that lending institutions would frown at such profligacy? No, because the aircraft have been acquired through a private charter firm, which is their benami owner. In return, the firm gets the business of maintaining the aircraft. This is not an isolated case. There have been cases when such acquisitions were either purchased for the promoter family out of company funds, or were private acquisitions made out of money diverted away from listed companies. The Securitisation Act may have empowered lending institutions to recover assets, but so long as they continue to remain lax and somnolent, industrialists will live life king-style.
The National Stock Exchange (NSE) began operations by permitting trading in a thousand odd scrips that met the minimum liqudity criteria. It was thus assumed to have avoided the high cost of listing and supervising 9000 odd stocks that is borne by the Bombay Stock Exchange (BSE) every year. It was also assumed to have listed a better set of scrips. Last week, the NSE issued another public notice to a set of companies asking them to show cause why they should not be delisted for violating the Listing Agreement. Take a look then at the companies on the list: CRB Capital Markets, CRB Corporation, G R Magnets, Anik Ship Breaking Industries, Real Value Appliances, Western Paques, Western India Industries, Shivalik Loha Mills, Pan Asia Appliance, Mrinal Dyeing, Maruti Organics, Kedia Distilleries, Kamal Overseas and Bharat Pipes. Clearly, the NSE’s insistence on mechanical numerical criteria sometimes leads to strange decisions.