September 18, 2000

Nandy's natter
Former editor, MP and champion of unusual causes, Pritish Nandy, has written several columns defending Ramesh Taurani, the promoter of Tips Cassettes- the company which raised several crores of rupees from the primary market. Nandy, makes the point that it is "unjust, improper and somewhat irresponsible" to call Taurani a murder, and that " (H)e must be allowed to run his business and live his life as a respected member of our civil society until and unless the courts find him guilty. Till then, we must accept him as innocent". Nandy is perfectly right. In fact, all the responsible newspapers have made it clear that Taurani is only a 'murder-accused', which is the factual position. As for him being allowed to "run his business and live his life"-that is precisely what Taurani has been doing since 1997, after the police arrested him for abetting the murder of Gulshan Kumar. It is only when he decided to pick up nearly Rs 100 crore from the primary market that the allegations have come in for fresh scrutiny. The point is that Nandy and others in the film industry may know Taurani personally, but the general public does not. The courts may not decide Taurani's guilt or innocence for years, but the investor has to make a judgment today about whether it is safe to invest in his company. In making that judgment, the promoters background is as important as the financial track record of his company.

Essar's problems

The depreciating rupee has improved the shipping industry's business prospects but Essar Shipping is still in trouble. It reported a 64 per cent increase in net profit for the first quarter, but has failed to pay interest on its non-convertible bebentures (NCD). CRISIL has downgraded its NCD issues to default grade (D). The one line press note holds no hope for investors. It now transpires that the parent company Essar Steel's losses are also worse than the RS 581 crore loss. Auditors Lovelock & Lewes say that the losses would have been almost RS 50 crore higher (to RS 630 crore) if proper accounting methods had been adopted. Essar Steel has also not provided for certain debts, loans and advances totalling RS 144.6 crore. Yet, the group itself continues to receive more funds from the financial institutions for its various projects.

For the frying pan to...

Stockbrokers of the BSE are a worried lot these days. A few weeks ago, one of the exchange's three trade unions which was controlled by the Shiv Sena has been replaced by another which is headed by Sachin Ahire, a close relative of alleged underworld don Arun Gawli. BSE employees who feel short-changed by the previous union hope the new leader will get them a better deal, but senior brokers are anxious. They see it as a move from the frying pan to the fire. Last fortnight a worried BSE obtained a stay order preventing both union leaders - Sachine Ahire and Suryakant Mahadik (of the Sena) - from entering the BSE premises in order to avoid ugly clashes. The union leader retaliated by obtaining the BSE premises in order to avoid ugly clashes. The union leader retaliated by obtaining special permission to enter the BSE during the Ganesh Puja and used it for a massive show of strength. The drama has just begun.

Serious allegations

Normally a company unable to pay listing fees does not dare to act tough with the stock exchange. I K Chuggani of Sellaids Publications Ltd is, however, a different kettle of fish. The Sellaids scrip by Chuggani's own admission has been suspended by the BSE for over two years because he couldn't pay listing fees. Chuggani has now been bombarding the press with emails and letters alleging that trading of Sellaids was extortion, malpractice and worse about the BSE's listing and suspension procedures and at the same time admits that he has no money to pay the bourse. His threats seem to have worked and the BSE lifted suspension of the Sellaids scrip on August 28. On the other hand, SEBI has decided to investigate his charges and has called him for a meeting. Could it be that the listing and suspension procedures are in need of an overhaul?

Updated weekly.

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

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