December 04, 2000

The Punjab Connection
Why should there be pressure to locate a modern, international class commodities exchange in Punjab when Mumbai is the obvious and sensible choice? Simple. Because commercial decisions in India are always based on mindless political considerations. The consortium which has won the mandate to set up the commodities exchange comprises Mahindra & Mahindra, ICICI Ltd, the NSE and the Punjab Warehousing Corporation. M&M, which has several projects coming up in Punjab apparently want to please the CM. They have gone ahead made a commitment to him that the registered office will be located in that State even though they are clear that it makes no commercial sense to it. Other consortium members are unhappy but remain mum. Apparently nobody learns for past decisions — the Infrastructure Development Finance Corporation suffers the inconvenience of a Chennai head office because a former finance minister wanted it located there. SIDBI started with a skeleton head office at Lucknow to please another minister, but over the years it was forced to shift its entire operations to the city, much against its wishes. The North East IDBI , set up by yet another finance minister is virtually still born and the Calcutta-based Industrial Investment Bank of India (formerly IRBI) is rarely even remembered in the financial sector. Isn’t it strange that even the private sector cannot stop jeopardising projects to please politicians?

Who is buying ACC?
For over a week now, newspapers have been reporting the curious price movement at ACC. A leading business paper reports that over 65 per cent of ACC equity has changed hands as the price moved from Rs 97 to Rs 143 in the space of a month. Surely it is an ideal case for investigation under SEBI’s price manipulation regulations? When we called SEBI to ask if it was investigating the price movement, top SEBI officials said they were awaiting instructions from the department in charge of takeovers to ask for an investigation. But isn’t it the official position, confirmed by Advocate General Soli Sorabjee that there was no takeover at ACC? Maybe SEBI believes that it does not have to step in unless somebody squeals and lodges an official complaint against the mop-up. If it is indeed true that a foreign cement major is picking up the stock, SEBI will be in the picture only when its holding reaches five per cent. Why was SEBI reluctant to investigate? Maybe, it had forgotten that it had powers to check manipulation of stock prices before it blows up into a crisis.

Finally a switch off
In the face of mounting pressure, a reluctant Maharashtra State Electricity Board has finally initiated action against the powerful but cash-strapped Mittal group. A week ago the Ispat Profiles plant at Pune was shut down after MSEB cut of power supply. A couple of hundred people have been rendered jobless and the company is apparently mounting pressure on the government to restore power. So far, the new MSEB chairman Vinay Bhansal has refused to budge. MSEB is only demanding that industrial units at least meet their current dues. Bhansal has told the Mittals that if the November bill is not paid up by the 30th, he would be constrained to switch off power supply to the Dolvi unit. The Mittals owe MSEB over Rs 300 crore and have been unable to pay even current bills. The group has on an average pays no more than 30 per cent of current dues, but ensures that power supply is not interrupted. We will keep you posted about whether the Mittals paid up or bought more time.

Kaun banega chairman
The joke at the IDBI these days is that the entire top brass is playing the KBC game — not the famous TV show but its own home version called Kaun Banega Chairman? It may be recalled that the government put out an advertisement to select the next chairman. The short list in IDBI’s KBC does not have a choice of four possible answers but six — of which three are outsiders and three are IDBI’s own senior EDs. Everybody seems to know who is in the short list and those who did not make it to the list. But the final choice rests, not with Amitabh Bachchan’s computerji but with some netaji in Delhi. Unlike Computerji, the netaji is not bound to pick the correct chairman for IDBI but the convenient one.

Updated weekly.

The author's e-mail address is: suchetadalal@yahoo.com

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