Bright Star has acquired a 16 per cent stake in VST and if it throws its weight behind BAT, the combined holding of the two in VST would be at least 48.17 per cent. Meanwhile, Russell Credit’s counter offer for 20 per cent in VST closed today with a total collection of about 9 per cent.
In addition, the ITC investment subsidiary had picked up about one per cent equity through market purchases. Thus, the total holding of Russell Credit would be marginally lower than 10 per cent.

All eyes are now set on tomorrow’s VST board meeting where the BAT proposal will be taken up for consideration.
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Government says BAT must get ITC go-ahead for VST stake
New Delhi—The commerce and industry minister Murasoli Maran today said that any fresh FDI proposal in the tobacco sector will be considered strictly under the provisions of the existing guidelines, which means that BAT will require a no-objection certificate from ITC since it holds a stake in the Indian company.

Government officials said there is also a policy of not entertaining any fresh foreign investment in the tobacco sector. This is significant for BAT since ITC has already made it clear that it will not give BAT the much-required NoC if it makes any attempt to increase its shareholding in the Hyderabad-based company.
Also the previous 13-month old Vajpayee government had permitted 100 per cent FDI in the tobacco sector.But Maran, who became the commerce and industry minister in the NDA government, subsequently told Parliament that his ministry would not take up for consideration any proposal relating to fresh FDI infusion in the sector owing to opposition from several quarters
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RBI wants Madhavpura Bank liquidated
Ahmedabad—The Reserve Bank of India has recommended to the ministry of finance to liquidate the Madhavpura Mercantile Cooperative Bank.

It says that in this way a large portion of depositors dues could be settled through funds from the Deposit Insurance & Credit Guarantee Corporation.
At the same time, RBI has said a new entity may be created after the liquidation process starts using fresh capital drawn from Gujarat’s numerous cooperative banks. This entity may take over the business of the erstwhile Madhavpura and try to affect a turnaround.
Here, the RBI has referred to the Madhavpura revival committee report, which had suggested two broad solutions for the revival of the ill-fated bank.
As the first possible solution, the committee had suggested that the bank be revived if DICGC offers a 10-year interest-free loan of Rs 475 crore, which will cover the gap in total funds required to salvage the bank.
However, the major chunk of the funds required to revive the bank was expected to come from other cooperative banks of Gujarat, who have agreed to pump in fresh capital to the tune of Rs 700 crore in the form of deposit liability.
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Solvay to pick up stake in Duphar
New Delhi—Solvay Pharmaceuticals’ proposal to acquire 21.8 per cent in Duphar Pharma has been cleared by the Foreign Investment Promotion Board. Duphar Pharma is the demerged pharma business of Duphar Interfran, a pharma and chemicals company. Solvay’s proposal is subject to Regulation 11(1) of the Takeover Code which means it may have to make an open offer for an additional 20 per cent in Duphar Pharma to the latter’s shareholders. The final approval is yet to come from Union commerce and industry minister Murasoli Maran.
However Maran’s decision depends on the outcome of a special leave petition challenging the demerger filed with the Supreme Court.
The Duphar Pharma board has also approved the acquisition. DIL.
A section of the Indian promoter family has opposed the scheme of demerger in court. These shareholders comprising Renuka Datla and her husband Vijay Kumar, brother of Vasanth Kumar, who hold about 6 per cent in DIL, have alleged that Vasanth Kumar and Solvay had violated contractual obligations under agreements signed many years back between Solvay and the Indian promoters.
According to these contracts, Vasanth Kumar of DIL is obliged to offer his shares in Duphar Pharma India to Renuka Datla and Vijay Kumar before he offers it to "any other outsider.
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Hyundai ties up with Automart for used-cars
Bangalore—The used car business is seeing the entry of some biggies. Hyundai Motors has launched an exchange programme in a tie-up with Automart, a joint venture between the Mahindras and Sai & Sanghi, a leading Maruti dealer in Mumbai.
The programme has been introduced on a trial-run basis at five dealerships (of the seven Hyundai dealers) in Mumbai. And will be shortly launched in Chennai as well.

Under this programme, an Automart representative evaluates and buys a used-car brought by a customer who can opt for a Hyundai product at these dealers.
Thereafter, the customer can pay the balance and buy a Hyundai car. Automart carries out minor repairs or refurbishment, if required, on the car and sells it with a six-month warranty.
The tieup with Automart has ensured that Hyundai does not have to set up its own infrastructure for this exercise and Hyundai dealers still stand to gain from this exchange programme.
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Enron deal gets murkier; judicial probe likely
Mumbai—The chief minister of Maharashtra Mr Vilas Rao Deshmukh’s indicated that a judicial probe over the Enron deal was likely but added that the party will abide by the decision the coordination committee takes over the issue.
Apparently, the coordination committee, that governs the nine-party Democratic Front coalition government, has already made it clear that it will not settle for anything less than a judicial probe under the Commission of Inquiries Act to fix the responsibility of the current "faulty deal".
N D Patil, convenor of the coordination committee, has gone on record saying all those responsible for the Enron project should be exposed and punished.
Sharad Pawar had last week "threatened" to pull out his party NCP from the DF, if the government announced the judicial inquiry to probe the Enron deal.
Subsequently, sensing the public mood, the NCP withdrew its statement and clarified that it was not averse to the judicial inquiry if a decision was taken by the Cabinet.
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DPC offers to cut tariffs to Rs 3.50
New Delhi—Dabhol Power says it will scale down tariffs to Rs 3.50 per unit for the first phase, exclusive of transmission costs, for consumers within Maharashtra.
Financial institutions and the Centre want tariffs to be cut down to below Rs 3 per unit for Enron’s total power.
However, given the fact that the consumer will have to pay a tariff, which will include transmission costs, it may still work out to be much beyond sustainable limits.
Energy experts had earlier indicated that other state electricity boards would be able to afford the Dabhol power only if the tariffs are around Rs 2.40 at the bus bar level.
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Cisco to set up high bandwidth computer network at IIT, Kharagpur
New York— With the aim of providing high bandwidth universal Internet access and personal computing capability to the entire student body at Indian Institute of Technology, Kharagpur, Cisco Systems plans to build a state-of-the-art computer network at the campus under an agreement signed with the United States-based IIT Foundation.
Prof M N Faruqui, who is currently IIT Foundation professor at IIT, Kharagpur, would manage the ambitious project on behalf of the Foundation.
The project will enable one of India's premier educational institutions to leverage the internet to advance the quality of its engineering education.
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London Pilsner gets strong
Bangalore—United Breweries, UB, is revamping the London Pilsner brand. It has come put with the offerings— London Pilsner and London Pilsner No 1 Strong.

London Pilsner No 1 Strong is a completely new offering from UB, while London Pilsner, the regular beer, has been revamped and relaunched.

The new campaigns "Every sip maha zip" are woven around the strength of London Pilsner No 1 Strong, while "A bit of London in every sip" will give the regular beer a spin as a truly English beer.

Say company officials at UB. the strong beer, is a higher alcohol content and a totally new brew has been worked out. More importantly, the colour of the beer is more like whisky and rum.
In other words, Kingfisher will leverage on its taste, while London Pilsner No 1 Strong will play on its strength and colour. The alcoholic strength, close to 8 per cent, is higher than that of either Kingfisher Strong or Haywards 5000.
fficials said.
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IOC may soon participate in Haldia
Kolkata-- Indian Oil Corporation, has almost decided to participate in the financially troubled Haldia Petrochemicals, HP, in West Bengal.
A senior official at the organization said IOC’s commissioning of consultancy firm KPMG to carry out the due diligence exercise proved that the PSU had almost taken a decision to take part in the prestigious Rs 5170-crore project.
Officials in IOC say that as the amount of investment required in the project exceeds Rs 200 crore, IOC is required to take the concurrence of the ministry of petroleum and natural gas. This would not have been necessary had the investment been Rs 200 crore.

HPL had been incurring heavy losses on account of a high interest burden, inspite of registering a good sales figure in the first year of its inception.
In the first eight operational months of the HPL, the company had already reached a sales figure of Rs 1400 crore. The company had been able to successfully penetrate in the markets of the east and south, besides tapping the overseas destinations of Bangladesh and Nepal.
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Morepen Labs signs agreement with Austria's Phafag
New Delhi—The Delhi-based Morepen Laboratories has announced an agreement with Austria-based Phafag to introduce caroverine, a cure for tinnitus.

Morepen will be marketing the drug in India and has received the Drug Controller General of India approval for conducting phase-III clinical trials, a company statement said here.
The trials will be carried in New Delhi, Mumbai, Ahmedabad and Jammu under the guidance of Prof K Ehrenberger and Dr D M Denk of University of Hno-Klinik, Vienna.
Tinnitus, commonly known as 'ringing in the ear', affects around 35 to 45 per cent of adults over 17 years of age at some point of times in their lives.
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Pepe goes into seconds
Mumbai—Pepe Clothing India, a subsidiary of Pepe Jeans, is getting into the seconds market with a vengeance. The company has opened three outlets in the last one year in Thane, Delhi and Chennai to sell seconds or rejected goods. Earlier the company had said that it would never enter the seconds market as it diluted the brand image.
Says Chetan Shah managing director, Pepe Jeans, says, the seconds outlets of Pepe Jeans is for customers who cannot afford to go to the main outlets.
At present 1 per cent of total sales turnover of Pepe comes from seconds outlets and about 5 per cent if it includes the yearly annual sales as well for Pepe.
With goods being discounted upto nearly 50 percent of the original price at factory or seconds outlets, these are becoming big business in India.
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Essar Power to pay disputed dues to FIs
Mumbai--Essar Power has agreed to pay disputed dues of Rs 185 crore to financial institutions (FIs).
In a statement the company said that it has no overdues and is resolving its issues with the lenders.
The company's new position could bring a satisfactory resolution to a vexed dispute.
The FIs had set a deadline of June 30 to recover their dues from Essar Power, and decided in principle to take legal action against the company if the matter was not sorted out by then. The two sides have been holding talks on the issue since then.
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Companies pledge stake to FIs against steel loans
Mumbai-- Jindal Vijayanagar Steel (JVSL), Essar Steel (ESL) and Ispat Industries (IIL) have pledged over 50 per cent of their equity to the financial institutions against loans advanced to their companies or for further restructuring of loans.
Jindal group flagship Jisco, promoter of the 1.6 million tonne hot rolled coil project of JVSL, has pledged over 50 per cent of its stake. Secured and unsecured loans of JVSL stand at Rs 4,098.46 crore as of March 31, 2000.
Jisco holds 50 per cent of the equity in the company, of which at least 31 per cent has been pledged to ICICI.
The promoters of Ispat Industries have pledged 51 per cent of their equity holding in IIL to IFCI. Secured and unsecured loans of Ispat Industries stand at Rs 4,767.35 crore for the year ended March 31, 2000.
The promoters — the Mittals — hold 54 per cent in IIL while 35 per cent is with the FIs, banks and mutual funds. The public holds 11 per cent.
The Ruias, the promoters of Essar Steel, have pledged 19 per cent of ESL’s equity (which accounts for 51 per cent of the Ruias’stake) to the FIs.
The promoters have also given an undertaking to the FIs for ‘negative lien’ on the shares.
Secured and unsecured loans of Essar Steel stood at Rs 4,418.84 crore for the year ended March 31, 2000.
When contaced, an IIL official said the pledging of promoters shares was not uncommon when loans are sanctioned.
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