October 02, 2000

Crore ya dus-crore
Now that India has its first bonafide gameshow crorepati, it is time for the other channels to worry. So far, it made no difference whether they offered a crore or dus-crore — nobody had won the jackpot. Now that Ghatkopar-boy Nawate has upped the stakes for those in the hosting game, it may be interesting to recall some KBC history. Initially, Star’s Indian bosses had only planned to create lakhpatis for five days a week. When the plan went up to head honcho Rupert Murdoch for approval he converted the lakh into dollars and came up with the pathetic little figure of just over $ 2200. “Naw,” he said, “give me your next big number” — and crorepati was born. After all, eight zeros spell a lot more class when you have a superstar anchor. The rest, as they say is history. When the crorepati show is actually aired in October, the Big B and Star TV too would be celebrating with Nawate. The superstar’s contract, we hear, is all but renewed barring the signature.

Nothing doing say MFs
Remember how the market watchdog had decided that mutual funds would have to maintain precise and detailed records of their investment decisions? Apparently, most fund managers have flatly refused to comply with SEBI’s orders. Some waffled, but refused to follow SEBI’s diktat while others argued with their Compliance Officers about how impossible it was to create such detailed documentation. The upshot is that the powerful fund managers have had their way with the regulator and a compromise has worked out. While there will be no official announcement, SEBI will not insist on its orders regarding detailed documentation being complied with.

An appetite for property
Ketan Parekh is clearly more fund-flush than the SEBI? The broker is understood to have snapped up the ICICI’s abandoned old office building at South Mumbai, after the market watchdog dithered over a decision for almost a year. Also, the broker is understood to have paid much more than the figure reported. Interestingly, ICICI seems to be buying property with as much zeal as it is selling its office block. In June this year it snapped up real estate worth over Rs 80 crore in Mumbai alone. This includes Rs 35 crore for a plot belonging to Standard Mills which is to house its Infotech venture; Rs 44 crore worth of property from Lokhandwala Constructions in Juhu and a flat worth Rs 1.6 crore from Cable Corporation of India. ICICI’s spokesperson tells us that the acquisitions are in line with its rapid growth in new areas such as insurance, e-commerce and others. Its gleaming new corporate headquarters in Bandra is already full, and ICICI says that it will continue to have an appetite for office space in the coming months.

Mittal’s building block
It’s interesting how companies always find money for property development. Take the Mittals of Ispat for example. They had used a front company and diverted funds to a plot at the posh Peddar Road in Mumbai for Rs 73 crore in 1994 at the peak of the real estate bubble. The purchase, at well above market rates, was one of those which helped create the bubble, because corporate houses were sloshing with funds collected from the primary market. In 1997, after prices crashed, the plot was transferred at a higher Rs 99 crore to Ispat Industries, ensuring an 18 per cent return to the front company. The funds came from Ispat’s $125 million Euro issue and no approval was sought from Indian institutional lenders. While Ispat cannot pay its electricity bills, it recently proposed to divert internal resources to the tune of Rs 108 crore to complete the residential apartment. Its argument: The sale of flats on completion of the building would fetch Rs 203 crore in December 2001 on a project cost of Rs 161 crore. This time however, the Indian lenders have refused to bite. They have turned down the diversion of internal resources for property development and in fact have sought to extend the charge over the property in favour of institutions.

Updated weekly.

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

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