Another `Global' takes advantage of name

Another `Global' takes advantage of name
N SHIVAPRIYA

MUMBAI, APRIL 6: Yet another software company, Global e-com India Ltd, is entering the capital market to raise funds. And on the face of it, it looks like the firm, which has no previous experience in the software field, is cashing in on the popularity of a more established IT firm associated with the "Global" brand.

The draft prospectus for the issue has been cleared by the Securities and Exchange Board of India (Sebi) and the company is likely to hit the market in April.

The firm is not part of the Global group companies, although its name is deceptively similar to Global Electronic Commerce Services Ltd (GECS), which has established itself as a software player of repute. Global Telesystems, the flagship of the Global group has been trading at around Rs 2,500 on the stock markets. Global e-com India, on the other hand, has been incorporated only as recently as January 24, 2000.

The issue is at par and the company wants to raise Rs 3.5 crore from the market. Interestingly, the company is also acquiring premises valued at Rs 3.59 crore from the directors H A K Balwa and I A K Balwa, according to the prospectus.

Following telephonic and written enquires about whether the GECS was coming out with a public issue, the Global group issued advertisements in leading dailies stating it had no connection with Global e-com India. Although, GECS is not a publicly listed company, it clearly enjoys a high valuation. IDBI recently subscribed to its shares at a premium of Rs 190 per share.

The group has also sent a letter to the department of company affairs requesting it to take action against Global e-com India Ltd to effect a change in name.

When contacted, H A K Balwa denied any intention of cashing in on the popularity and reputation of the "Global" brand name. "There are 420 companies registered with the `Global' name. The question of misleading the investor does not arise," he said. On why the Balwa group had chosen to name the company, `Global e-com', especially when it had not used it for any of its other group companies, he said it was to represent its line of business. The lead managers to the issue, Fedex Securities Ltd, refused to comment saying that the matter was extraneous to the prospectus.

Sometime back, blue-chip Infosys Technologies went to court on a similar issue against Aftek Infosys. The case is pending in the Calcutta High Court.