June 12, 2000

Careless regulator

The Securities and Exchange Board of India (SEBI) has begun an exercise to indentify Debenture Trustees of defaulting and sick companies. Last Thursday, it dashed off a letter to some financial institutions asking, by "return fax" whether they were Debenture Trustees to a set of 15 companies. Most companies on the SEBI list have long been defaulters, but a little hand - written postscript by the SEBI official wanted confirmation about whether the companies are "under liquidation or BIFR proceedings". The list comprised: DSJ Finance Corporation (part of the Dalal Street magazine group), Ross Murarka Finance, Western Orissa Sugar, Dynamatic Forgings India, Prudential Capital Market, Enarai Finance, Hanil Era Textiles, CRB capital Markets, Mafatlal Industries, Uniworth Textiles, Indian Seamless Financial Services, Amrut Industries (formerly Amrut Milk Products), Janak Intermediates, S M Zschimmer & amp; Scharwaz Chem and finally ICICI Ltd.

If SEBI expects to be taken seriously as a regulator, its officers should be trained to be more careful while dashing off letters to capital market intermediaries. Surely SEBI ought to know about the status of CRB, Prudential and Hanil Era. Those like Dynamatic Forgings or Ross Murarka are of 1980s vintage and should be on a regulators list. But so many years later, SEBI is still seeking names of the Debenture Trustees. The most shocking inclusion, is that of ICICI. SEBI seems unaware that ICICI as a leading financial institution has probably acted as Debenture Trustee for a large number of debenture issues.

The ICE game

The Reliance Group is completely hooked on to the ICE sector (Information, Communication and Entertainment ). Typical of Reliance, the group plans to be one of the biggest service providers in the business covering the entire gamut of services from telecom, radio, Internet access, cable television and entertainment - it will extend from providing hardware linkages to distribution access, from wireless to optic fibre. "We will be the biggest player in the business and we will convert every home television into a computer," says a source. The investment will be bigger than that in setting up its mega refinery at Jamnagar.

Entertainment War

Having decided to enter the sector, Reliance is aggressively chasing up business opportunities in the entertainment business. Last week, it out bid Zee Telefilms, now its big competitor, by a hefty margin to bag an Entertainment complex at the new financial district at Bandra-Kurla in Mumbai. The financial centre was Mumbai's solution to decongesting the unaffordable Nariman Point area in South Mumbai during the big real estate bubble, three years ago when property prices plummeted and the new financial district also lost its glamour. Things have begun to look up with a few large corporations ready to relocate offices to their spanking new buildings at Bandra. The entertainment centre, planned as an elegant complex complete with several mutiplex cinemas, bowling alleys, games, restaurants and food courts, is supposed to provide some diversion to office-goers in the area. According to a source, Reliance took no chances in bagging the project. Its bid, at Rs 1,500 a sq ft for the space was substantially higher than Zee's bid of around RS 1,000/sq ft- perhaps an indicator of how fiercely ti plans to compete for dominance in the ICE business.

Kidnap that was not

Late in the night, last Wednesday, certain circles were agog with rumors that a close associate of former big bull Harshad Mehta had been kidnapped. But when a newspaper called the "kidnapped" man's house, he answered the phone himself, insisting that the episode was a hogwash. The smoke, we hear, was not without fire. There was a definite threat and a shakedown by the underworld and some payment was either made or promised to cover stock market losses in recent weeks, before the man was let free. The matter will hopefully end there.

 

Updated weekly.

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

Other columnists:

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