DCA refuses to clear salaries of top MNC managers
New Delhi - The Department of Company Affairs (DCA) is taking several companies, including quite a few MNCs operating in India, to task for not filing their annual reports.
The DCA has refused to clear the remuneration of foreigners employed by these companies until they disclose the mandatory information required of them to the Registrar of Companies. Since managerial remunerations primarily include the salaries of the directors of a company, the MNCs have no option but to meet the filing requirements.
Under company law, managerial remunerations beyond prescribed levels have to be cleared by the DCA for all companies. But for foreigners working in India, as also the NRIs, an additional clearance, including security and of the salaries drawn, has to be granted by the home ministry.
Companies are required to file their annual returns and the balance-sheet with the registrar annually. In case theres a violation, the DCA is required to wait for six months, before it can proceed against such violators, including threatening to strike them off the registers.
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DCA to inspect Reliance Group's books
New Delhi -  The DCA has also decided to slap a notice under Section 209 of the Companies Act on Reliance Petroleum, that will allow officials inspect the books of RPL, its parent company Reliance Industries, and that of the group company Reliance Capital.
The DCA's move follows allegations that RPL -- a subsidiary of RIL -- had invested in shares of group companies RIL and Reliance Capital in 1994-95, but its balance-sheet for that year circulated to investors failed to mention the fact.
Bahujan Samaj Party MP Rashid Alvi had alleged that the version of the RPL balance-sheet for 1994-95 circulated to shareholders did not mention that the company purchased 2.25 million RIL shares of Rs 10 each and 1.45 million Reliance Capital shares of Rs 10 each.
Alvi charged that the company used the money raised from the public to finance trades in group company shares and tried to conceal this from shareholders.
An RIL spokesperson said that RIL has not received any intimation from the DCA regarding investigations under Section 209 of the Companies Act. Reliance reaffirms that it has complied with all applicable laws, rules and regulations. Further, Reliance is fully committed to cooperate with all appropriate authorities and provide all information as required by them.
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No rebates on commission from private insurers
Mumbai - Private sector life insurance companies have stopped the age-old practice begun by Life Insurance Company of rebating on commission of agents to lure new policy-holders. It is learnt that Om Kotak Life Insurance has sacked two agents who passed on their commission to their customers as an incentive to buy insurance policies. Other life insurers like Birla Sun Life and ICICI Prudential are issuing strict directives to their agents.
Says a top official with an insurance company, "our agencys force should be professional enough to be called advisers, and we want them to earn their commissions by providing proper advice."
Considering that commissions go up to 35 per cent in the first year, rebating of commission can make a significant difference in the returns to an investor in a life insurance policy and some agents are willing to forego a significant chunk of their first years commission as they are assured of steady commission payments through future installments.
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Steel cos to curtail HR coil production
Mumbai - Steel companies have decided to cut their total production of hot-rolled coils in order address the oversupply situation and tighten flagging prices. The companies who have taken this decision are; SAIL, Tata Steel, Essar Steel, Jindal Vijaynagar and Ispat Industries.
Sources say, the quantum of the cut is about 15 per cent on an average, as production capacity for hot-rolled coils in India is 12 million tonnes, compared to a demand of only 8 million tonnes.
Hot-rolled coils is a basic flat steel product made into plates and pipes. It is also an input for cold-rolled steel, used in automobiles and consumer durables. Seventy per cent HR coils is used as an input for making CR products.
The steel industry has been hit by both oversupply and a steep price fall in hot-rolled coils. Realisation has fallen by over Rs 4,000 per tonne on a year-to-year basis. At present the realisation is pegged at below Rs 12,000 per tonne.
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More relaxed norms for IBP bidders
New Delhi - Now bidders for IBP can take it a little more easy as the government plans to make it easier for petroleum companies to acquire marketing rights and proposes to relax the investment requirement from Rs 2,000 crore to Rs 500 crore. In addition the bidder would be entitled to an interest earning as the money would be invested in the Oil Development Board.
A beginning in this regard would be made with IBP, which is the first big-ticket disinvestment in the oil sector. Here, bidders would be required to deposit only Rs 500 crore in the OIDB instead of Rs 2,000 crore, as demanded earlier, either in infrastructure or furnished as bank guarantees.
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Divestment of A-I hits low patch
Mumbai - The Cabinet Committee on Disinvestment will once again take up the issue of Air-India's strategic sale following the decision of Singapore Airlines, a joint bidder with Tatas, to withdraw from the race, Union heavy industries and public sector enterprises minister, Manohar Joshi, said. Disinvestment secretary Pradip Baijal said that should the Tatas walk out, the centre will have to examine whether to sell Air-India at all or to sell it after changing the rules, indicating that the government was willing to change the rules to privatise national carrier Air-India if the Tata Group -- the only remaining contender withdrew from the bidding.
The Tata group said it was keeping all options open including bidding on its own for a stake in Air-India.
Estimates of the loss-making Air-India's total value range widely from $2.13 billion to a conservative $500 million.
Sources said the Tatas were still keen to have an operating airline as a partner, but added serious talks were yet to commence with any airline.
Sources in the company said the Tatas are interested in Air-India because it compliments their presence in the hospitality industry.
Asked how long the government would give the Tatas to come up with an alternative partner or pull out, Baijal said it could be anything from six days to six months, but not more.
Disinvestment Minister Arun Shourie called SIA's withdrawal "a substantial setback" and said it did not do any good for the country's image.
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RBI bars GTB from opening new OCB accounts
Mumbai - The Reserve Bank of India has stopped Global Trust Bank from opening any new account on behalf of overseas corporate bodies following an inspection carried out by RBI on GTBs two Mumbai branches through which a clutch of OCBs had routed funds to manipulate the market.
RBI says that GTB had no system to monitor the prescribed ceiling of 5 per cent holdings by an individual OCB in a company and has referred the issue to the Enforcement Directorate.
Under the circumstances, GTB cant service an OCB account till it puts in place a proper system to monitor the portfolio investment scheme (PIS). With regard to the existing OCB clients, the chairman of GTB has been advised to appoint a designated officer to approve the PIS transactions of such OCBs.
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TRAI seeks industry views on ISD opening up
New Delhi - Before opening up international long distance communication from April 2002, the Telecom Regulatory Authority of India (TRAI) has asked for opinions of industry players on the one-time entry fee, extent of revenue sharing and number of players among other crucial issues for framing guidelines.
TRAI will also take up issues such as whether or not to limit the number of ISD players that should be allowed to provide this service (duopoly or three-four operators) or to allow open competition without any limitation on the overall number of operators.
In a consultation paper issued by it TRAI said that final set of recommendations would be submitted to the government by end of November for framing guidelines by the Department of Telecommunications.
TRAI has fixed September 30 as last date for receiving comments on the various policy issues.
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Govt. may abolish import duty on hardware capital goods
New Delhi - In order to provide a fresh lease of life to the country's ailing computer hardware industry and encourage larger investments in hardware manufacturing, the information technology ministry is thinking of completely abolishing the present 25 per cent import duty.
Government sources say the duty reduction will be implemented in a phased manner over the next two years.
This move is likely to bring down the cost of setting up manufacturing facilities as well as computer hardware in the Indian market.
According to industry estimates, the country's computer hardware sector has received investments to the tune of Rs 1,300 crore over the last ten years.
India's computer hardware market has not performed as well as the software services sector. According to annual industry performance, compiled by the Manufacturer's Association of Information Technology (MAIT), annual PC sales for the year 2000-01 have grown by only 34 per cent to touch 1.8 million units against previous year's 37 per cent growth. Certain global hardware companies interested in setting up manufacturing facilities in India have kept away owing to problems relating to infrastructure and a high duty structure.
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