Enron empowered to cancel contract
London: The Dabhol Power Company board has okayed Enron management to pull out of the Dabhol Power Project, while its lenders have suggested a renegotiation.

MSEB was not allowed to vote on the decision on the plea that it was an interested party. The decision was taken with six votes in favour and the single opposition vote cast by IDBI.

Enron holds 65 per cent stake in DPC, while US-based GE and Bechtel hold 10 per cent each. The balance 15 per cent is held by MSEB through a special purpose vehicle, Maharashtra Power Development Corporation.
Financial institutions such as ANZ Investment Bank, Credit Suisse First Boston, Citibank, ABN-Amro and the State Bank of India have been reported to have advised Enron against terminating its power purchase agreement with MSEB.
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Brokers own 41 per cent of Nedungadi Bank
Mumbai: Brokers have cornered 41 per cent of the equity in the Kerala-based Nedungadi Bank. Of these, two identified groups of brokers—led by Rajendra Banthia and Shrikant Mantri—hold 21 per cent of the shares.

The brokers gained a foothold by subscribing to the unsubscribed portion of the rights issue made in 1996.

Another broker, whose name figures in the Sebi investigation into the recent bear hammering, is believed to hold around 30 per cent in the bank through a clutch of entities.

According to bank officials, although the broker directors do not interfere in the day to day running of the bank, they play an active role in the annual general meeting and push their decisions through. Two of these include installing broker directors M G Damani and Suresh Vaidya on the board, and pushing through a resolution to make Nedungadi a clearing bank for the Bombay Stock Exchange. This, despite opposition from other directors on the plea that the Mumbai branch of the bank was too small to handle huge volumes.
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Binani may bring in foreign ally to expand zinc business
Mumbai: Binani Industries, which is planning to hive off its zinc business into a separate subsidiary and expanding the business, is likely to offload 49 per cent of the stake to a foreign partner.

This is more likely if it fails in securing the 26 per cent sahre it is bidding for, in public sector Hindustan Zinc.

The group has been planning to expand its zinc business in a big way in which acquisition of stake in Hindustan Zinc is part of the game plan. With a number of contenders including multinational metal majors vying for the company, Binani is exploring other avenues, of which bringing in a strategic partner is one option. The funds thus brought in would go into the expansion of the business.

The company is planning a Rs 500 crore expansion and technological upgradation plan including trebling capacity to one lakh tonnes per annum from 30,000 tonne.
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Parle Fruits & Foods ceases operations
Kolkata: Parle Fruits and Foods Private Limited, the pickle and spice making Parle group company has closed operations.

Parle Fruits and Foods was set up three years ago in a bid to enter the foods business, leveraging the Parle brand name. The products were marketed under the brandname Uma, after its director, Uma Chauhan, sister of Parle chairman Ramesh Chauhan.

The company operated in the east, north and south India, with an office in Mumbai. It is reported that all operations have been stopped, but a lot of loose ends remain, including uncleared stocks, dishonoured cheques, creditors and prematurely terminated deals and disgruntled super stockists.
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Sops in lieu of monopoly for VSNL
New Delhi: Salomon Smith Barney and Credit Suisse First Boston — the two global consultants appointed by the government to suggest compensation for VSNL for termination of its monopoly on March 31, 2002 — have suggested a package of compensation in kind, if not cash , for the company.

These include waiver of licence fees, and routing of licence fees and revenues for national long distance through VSNL.

Salomon Smith Barney has estimated that the cumulative loss to VSNL through its termination of monopoly would be to the tune of Rs 2,936.4 crore, while CSFB estimated the loss to be Rs 2,225 crore.

The consultants have suggested compensation in the form of full waiver of entry fees and licence fees for VSNL for domestic long distance services till the financial year 2006; receipt of entry and licence fees payable by ILD operators after April 2002 until 2006, exemption to VSNL from payment of licence fees from 2002 until 2004; and re-routing of all outgoing DoT/MTNL traffic through VSNL after April 2002 for a period of ten years.

On the other hand, the government has put together a package which includes licence to run domestic long distance services with the government paying to VSNL a sum equal to its entry and licence fee for five years from April 1, 2001, net of taxes, and waiving the performance bank guarantee of Rs 400 crore; granting a category A ISP licence to VSNL; and any possible compensation if found necessary after review in the future.

The government's proposal will be put up with the shareholders of VSNL for their approval at their extraordinary general meeting slated to be held on May 2, 2001.
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