Commerzbank files criminal suit against ICICI and Arvind Mills
Mumbai—The Indian unit of Commerzbank has filed a criminal complaint under Section 409, 421 and 424 along with section 120B of the Indian Penal Code against ailing textile company Arvind Mills, AML, and financial services firm ICICI for breach of trust, the bank said on Friday.
Offences under these sections relate to criminal breach of trust, dishonest or fraudulent removal or concealment of property to prevent distribution amongst creditors, and criminal conspiracy.
Commerzbank’s contention is; Arvind Mills had secured a $75 million loan syndicated among 14 banks in November 1996 for which the security was the moveable and immoveable assets of the company — both present and future. ICICI was the security trustee and agent on behalf of the syndicate as per the terms of the security agent and trust agreement executed in March’97.
From September 99 Arvind Mills started defaulting on its loan servicing. To sort this out, Jardine Fleming was appointed as financial advisor, which in a presentation to lenders pointed out that Arvind Mills had done a series of sale-and-lease back deals with ICICI in three tranches in September’98, and in March and December’99. These were of assets that were pledged as security of lending syndicate and the sale-and-lease back deal was done without their prior knowledge.

Commerzbank says that when the matter was raised with ICICI, it denied having committed a breach, and justified the same by pointing out letters exchanged between its solicitors and those of the syndicate.
Further, it said that Arvind Mills’ 35 per cent sale in two of its branded garment divisions — Arvind Clothing and Arvind Fashions —had buyback obligations embedded in them. The balance 65 per cent stake was transfered to Arvind Mills’ investment company, which in turn was again pledged with ICICI.

Commerzbank also says that Rs 395 crore was diverted in 1998-99 and 1999-2000 by Arvind Mills to various subsidiaries even as it was defaulting to creditors.

The complaint is over its specific $10 million dollar exposure — part of a $75 million syndicated foreign currency loan — on the grounds that the FI’s Rs 361.90 crore sale-and-lease back deal, amongst others, with the textile company allegedly comprised lender security and interest.
The Metropolitan Court has now issued summons to ICICI’s managing director & CEO KV Kamath; Joint MD & chief operating officer Lalita Gupte; former deputy MD SH Bhojani; executive directors Kalpana Morparia and S Mukerji; and general manager (special assets group) Mritunjaya Rao; and Arvind Mills’ MD Sanjay Lalbhai; director Naishadh S Parikh; and chief financial officer Jayesh Shah.

Commerzbank’s Singapore branch was part of a group of 14 banks that lent AML $75 million in November 1996.
ICICI was one of the lenders, and also appointed to serve as trustee for the loan.
Back to News Review index page  

Bisleri to sell out to Danone
New Delhi-- Ramesh Chauhan is doing a Thums Up again. He is selling his water brand, Bisleri. Reliable sources indicate that French food company Groupe Danone is all set to pick up majority stake in Bisleri.
Sources said the final negotiations on between Parle Bisleri and Danone, and the deal would be finalized by the end of the month however, Danone would not pick up the entire stake but a part of the stake.
Senior officials at Bisleri, confirmed that the talks are on.
Danone is already present in the upper-end market segment with brands like Ferra Relle and Evian.

Bisleri, with a marketshare of around 60 per cent, is the market leader in the growing mineral water market, estimated to be at Rs 500 crore. It has been the target of multinational companies which subsequently set up their own bottled water operations in the company over the last two years.
Back to News Review index page  

Aptech to be demerged as board approves plan
Mumbai—Aptech Ltd, the Mumbai-based software and training company has decided to demerge its training and software business and the board of directors has decided to create two listed companies for the two businesses.

Another group company Hexaware Technologies will be merged with Aptech for its software business. The training buisiness will retain the Aptech brand name.

The new software company is yet to be christened.
The swap ratio decided for the merger is three shares of Hexaware for one share of Aptech. Hexaware has a Rs 5 paid up share, while the Aptech Software share has a face value of Rs 10.
According to Atul Nishar, chairman, Aptech, the board choose to demerge the training business on the advise of our consultants Deloitte Haskins & Sells. It was decided to retain our section 10A and 10B benefits on the income-tax front granted to software export companies and it would have created a technical hitch if our software business had been demerged.
Back to News Review index page  

Satyam plans to offer equity to partners, clients
Mumbai—Satyam Computer Services is planning to offer equity equivalent to 2 per cent of its outstanding equity to strategic partners and customers to help build its business.
According to the company this is to add strength to its expanding business operations and to exploit business opportunities by way of joint ventures, mergers, acquisitions and strategic alliances.
Satyam raised $161.9 million through an offering of American Depository Receipts last month and listed on the New York Stock Exchange.
The funds raised will be used to retire some part of its debt, for acquisitions and for expansion.
Back to News Review index page  

Bristol-Myers buys DuPont unit for $7.8b
New York--Bristol-Myers Squibb has decided to buy DuPont Co’s pharmaceuticals unit for $7.8 billion. The company will obtain DuPont’s pipeline of experimental drugs nearly all of which are in earlystages of human trials — including treatments for the HIV virus, blood clots, rheumatoid arthritis, solid cancers and obesity.
This comes after recent US patent expirations on breast cancer drug, Taxol, anti-anxiety treatment, BuSpar and diabetes treatment drug, Glucovance.

Bristol-Myers is the world’s No. 5 drug maker with about $13.3 billion in prescription drug sales last year from such medicines as Glucovance and Taxol.
DuPont Pharmaceuticals’ slim portfolio of medicines brought $1.5 billion in sales last year. These include Sustiva for treatment of the HIV virus and Coumadin for breaking up blood clots.
DuPont, USA’s largest chemical company, will retain its interests in popular hypertension drug Cozaar, which is marketed by Merck & Co and from which DuPont receives undisclosed royalties.
Back to News Review index page  

Voltas forms manufacturing JV with Fedders
Mumbai--Voltas is forming and an equal "manufacturing-only" joint venture with Fedders Corporation of the US. Voltas is thus hiving off its AC manufacturing unit at Dadra to the joint venture, its equity contribution in kind, while Fedders will bring its 50 per cent contribution in cash.
With an equity base of Rs 21 crore the venture will give marketing and distribution rights to Voltas, which will buy ACs from the venture and sell them through its existing network under the Voltas brand.
Airconditioners contribute 25 per cent revenue to Voltas’ turnover. Technical inputs from Fedd- ers and the advantage of global sourcing are expected to significantly benefit Voltas which, after six decades of dominance, has slipped to third position behind Carrier and LG, according to industry sources.

Fedders plans to use the joint venture as a global sourcing hub, which could significantly push up the 1.5 lakh-unit’s capacity utilisation.
Back to News Review index page  

VST open offer stayed by AP High Court
Hyderabad-- The Andhra Pradesh High Court has stayed the open offer made for VST Industries with Justice Gopal Reddy restraining both Bright Star and Russell Credit from proceeding further in acquiring VST shares.
Counsel V Rajagopala Reddy on behalf of VST shareholders, MV Subramanyam and Anita Paul, the petitioners argued that both the letters of offer were "misleading and detrimental" to the interests of VST adding that the offers were in violation of the provisions of the Sebi Act and Sebi Takeover Regulations of 1997.
They allege that Sebi’s permission to allow open offers by Russel Credit and Bright Star had various infractions and that Sebi had failed to ensure proper and adequate disclosures.

The Centre, Sebi, Bright Star, Russel Credit and VST were made respondents to the petition. The petitioners argued that the Damanis did not have the management expertise to run VST and also said that the Damanis were not financially sound citing the fact that they did not deposit the required 25 per cent of the total consideration in the form of cash as escrow. On the offer made by Russel Credit of ITC, the petitioners claimed that BAT is seeking to indirectly increase its stake in VST through ITC, since the former has not been given permission to do so directly.
Back to News Review index page  

A-I net worth crashes to Rs 350 crore
New Delhi—The net worth of Air India is now one-fourth of what it was six years ago. It has plunged to Rs 350 crore in 2000-01 from an all-time high of Rs 1,435.40 crore in 1994-95.
Air-India is likely to end the current fiscal with zero if not negative cash flows, which might well erode its net worth further. Sources cited stiff competition from international carriers, paucity of funds for crucial investments and plunging quality of service as the main reason for the national carrier’s sorry state of affairs.

Air-India has however, attributed the losses and the dwindling market share to the rising fuel and employee costs.
Back to News Review index page  

Leyland plans another VRS
Mumbai--Ashok Leyland will soon introduce another voluntary retirement scheme aimed at trimming the workforce by around 1,350 over a two-year period, or 10 per cent of its present employee strength and sources said the details of the scheme—the second in the past 15 months—is being worked out. The company introduced its last VRS in April 2000. The initiative comes shortly after the company signed a long-term incentive-based wage settlement with about 1000 workers at its Hosur manufacturing unit last month.
Back to News Review index page  

M&M cuts production puts in place a 5-day week
Mumbai--Mahindra & Mahindra is shifting to a five-day work schedule as part of an "inventory management initiative" which will be effected at all four of its automotive plants—Kandivli, Igatpuri, Nashik (Maharashtra) and Zaheerabad (Andhra Pradesh).
The company said curtailment of the schedule is to "align production with the market demand at all the automotive plants." However there will be no wage cuts to employees as a result of the new initiative, in spite of the reduction in man-days.
Auto analysts see the move as a direct fallout of the continuing decline in the company’s sales of utility vehicles. This is in sharp contrast to the performance of its tractors division, which increased its market share last fiscal by over 7 per cent, inspite of stiff competition.
Back to News Review index page  

Now Cielo taxis…move over Ambassador
Bangalore--Daewoo Motors Ltd' is repositioning the Cielo as a tourist taxi. The official said Cielo will be repositioned as a tourist vehicle. Its main competition will be Ambassador and Premier Padmini cars, widely used as taxis in New Delhi and Mumbai.

Daewoo will launch attractive financing options for the tourist operators to bridge the price gap with other cars. "Cielo is being increasingly seen as a replacement by tourist operators because it gives passengers far more comfort drive than existing models which are used as taxis," the official said.
Cielo's repositioning will help it to sustain its growth. The company has so far sold around 55,000 Cielo cars this year.

Apart from this, Daewoo India is planning to restructure its debt component and increase its equity to over 90 per cent in the company.
A top Daewoo official said was part of its effort to improve the financial health of the company, its total debt will be restructured and converted into equity which will increase its holding to over 90 per cent. The company now plans to break-even during the current fiscal.
Back to News Review index page  

Bharatiya Electric joins the race for govt stake in Jessop
Kolkata—Another bidder in the form of Bhartiya Electric Steel Co has emerged for taking over the government's controlling stake at the ailing public sector Jessop & Co Ltd, along with Ashok Leyland Ltd, Titagarh Steels Ltd and Srei International, according to sources in the company.
It is not clear though if Jessop will be handed over to a single bidder or whether the government will sell off its different units to separate companies that have shown interest.
Jessop has two main stream of business - manufacturing wagons and heavy engineering. While Ashok Leyland seems to be interested in the heavy engineering portion, the private sector wagon manufacturers will be interested in taking over the wagon production units.

Jessop has successfully reduced it staff strength from an odd 2,800 to 1,242 through its recently announced voluntary retirement scheme (VRS).
Jessop is a subsidiary of Bharat Bhari Udyog Nigam Ltd (BBUNL), which has 10 subsidiaries. All are on sale. Jessop is the only company of the 10 that has attracted interest.
Back to News Review index page  

Wockhardt; Esop for 175 officers
Mumbai-- Wockhardt the Indian pharma major is introducing an employee stock option plan (ESOP) soon. Habil Khorakiwala, chairman and managing director, Wockhardt, said that 175 senior and top management officials would be eligible for the ESOP in the first phase. The company also passed a resolution to make research and development (R&D) the main object of the company.

Khorakiwala projected a sale of Rs 5 crore for its brand Epox, erythropoietin. The company also expects to double its sales of Biovac-B, a hepatitis B vaccine, by this year. The company also has in the pipeline five-six new recombinant bio-pharmaceutical products which will be launched in the next three years.
Back to News Review index page  

Petronet defers Managlore unit
New Delhi—Petronet LNG Ltd (PLL) has put on hold plans to set up a 2.5-million tonne per annum (mtpa) liquefied natural gas (LNG) terminal at Mangalore in Karnataka.
It has instead decided to double the capacity of its Kochi terminal to 5 mtpa. Though the Kochi terminal was initially planned with a 2.5 mtpa capacity, PLL has now decided that the terminal will handle double the quantity of LNG at a later stage to serve the consumers in Karnataka. For this, Gas Authority of India (GAIL) would be laying a pipeline from Kochi to Mangalore-Bangalore.

The company said this was being done not only for cost-effectiveness and optimisation of regassification facility in Kochi but also for providing cheaper gas to consumers in Karnataka. The PLL brass got the green signal from the Karnataka and Kerala governments last week following meetings with senior officials of those two states.
Back to News Review index page  

Apollo Tyres eyes Chinese firms
Kochi-- Apollo Tyres is scouting for firms in China.
A delegation from Apollo Tyres went to China a month ago and a second delegation, mainly to look into the financial matters, is at present in China.
Sources in Apollo Tyres said two firms had been shortlisted and the company would go ahead, once it got a controlling stake in any one of these. They refused to divulge more details.
Back to News Review index page  

Pal enters into pact with China Motor Corp
Mumbai—Premier Auto-mobiles Ltd (PAL) has entered into a pact with China Motor Corporation of Taiwan to manufacture a lightweight van called "Varica" in India. The lightweight van is one of China Motor’s best-selling commercial-use models in recent years and will compete with the Maruti Omni.
China Motor will start shipping the major components of the car in October and have them assembled in India. The car body and sheet metal would be shipped from Taiwan. However, the van’s key components such as engine, gear-box and chassis would be manufactured in India due to regulations governing the local content rate of the Indian auto industry.
The initial monthly production of Varica would be 1,000 vans. The venture hopes to achieve an annual sales target of 10.000 vehicles. China Motor would also provide the technology support to PAL.
Back to News Review index page  

Coke; bids to connect with the youth
Mumbai—Coke is trying to connect to the youth of India and has launched an aggressive nationwide mobile promotion — Coke Mobile Promotions.
Coca-Cola’s e-marketing partner, Hangama.com, has tied up with leading mobile service providers across the country to launch this SMS-based promotion.
Says Coca-Cola India general manager consumer activation and promotions & marketing, P Krishnamurthi, "The SMS-based promotion has brought in Airtel in Delhi and Hyderabad, Orange in Mumbai, Command Cell in Calcutta, Cell Force, part of the Orange network, in Gujarat, AT&T in Pune and Spice in Bangalore. This is the first time that leading MSPs would be working together on a promotion such as this, Mr Krishnamurthi claimed.
Back to News Review index page  

CTV sales hit block; grow by 3.8 per cent till April
New Delhi--Colour television (CTV) sales grew by only 3.8 per cent during January-April this year at 1.64 million units against 1.59 million in the same period in 2000.
BPL, Videocon and Onida managed to control more than 40 per cent share of this extremely competitive market, while Koreans LG and Samsung’s market shares also inched upwards.
Japanese brand Aiwa’s sales fell drastically, with the brand eroding its market share by more than half to 4 per cent from 8.6 per cent in the first four months of last year, as per market research agency ORG’s latest report.
However BPL reported a slight sales drop at 18.9 per cent market share against 19 in 2000, even as arch rival Videocon gained at 12.1 per cent against 11.8 per cent in the same period last year. Onida also lost sheen with 10.1 per cent share in the first four months of this year against 11.3 per cent during 2000.

During the first four months of this year, both Samsung and LG increased their sales and consequently market shares. Samsung cornered 8.3 per cent of the colour television market against only 6.7 per cent last year, whereas LG inched up to 6.8 per cent from 6.4 per cent last year.
The only other Korean brand, Daewoo, slumped with market share falling to 0.4 per cent from 1.6 per cent last year.
Philips also slipped with 3.9 per cent against 4.2 per cent last year; Salora was at 0.9 per cent against 1.4 per cent, while Sansui increased its presence with 6.5 per cent against only 5.2 per cent last year.
Thomson reported slight fall at 2.5 per cent against the earlier 2.8; TCL grew to 3.2 per cent from 1.3 during the last year; Konka fell from 1.1 last year to a mere 0.6 per cent.
Panasonic continued more or less unabated at 2.1 per cent whereas Akai almost doubled sales at 4.5 per cent market share against 2.9 per cent cornered in the first four months of last year.
Back to News Review index page