GIHL's Mittal: Steeling up for a 'brotherly' fight

The facts of this case are curious, to say the least. And the battlefield is located in the unlikeliest of places: Liberia, in West Africa. The government there had invited bids from global steel companies to develop its iron ore industry. Lakshmi Niwas Mittal's eponymous steel company won the contract in May 2005, and, for good measure, offered to develop the port of Buchanan and a railway system in that country. So far so good! But this is where Mittal's younger brother, Pramod, got into the act. His company, Global Infrastructure Holdings Ltd (GIHL), and Provider Ltd, his Liberian partner-which had submitted a joint bid-took the Liberian government to court alleging that it had "illegally" favoured Mittal Steel while awarding the contract. The GIHL consortium claims it had signed an MoU with Liberia Mining Corporation for the same mining rights in November 2003. There are dark hints of international political intrigue and influence peddling. Jacob Varnam, a Director of Provider, has reportedly alleged that John Blaney, us Ambassador to Liberia, prevailed upon Charles Gyude Bryant, Liberia's interim President, to swing the deal L.N. Mittal's way. Apparently, Inland Ispat, a Mittal Steel-owned company, had written to Blaney in September 2004 that sourcing cheap iron ore from Liberia for its us operations would protect in excess of 30,000 jobs in the Chicago area. Calls to L.N. Mittal's offices in London did not elicit any response. Devasis Chattopadhyay, Senior Vice President (Corporate Communications), Ispat India, a Pramod Mittal company, clarifies: "We have not filed any case against Mittal Steel. Our grievance is against the Liberian government. It just happened that the company on the other side happened to be L.N. Mittal's." Point noted.

-Sahad P.V.

Paul: 0, Jindal: 1
Brother-in-law outscores Swraj Paul.

Caparo Maruti's Paul: Very little to smile about

The battle between lord Swraj Paul and his brother-in-law M.D. Jindal over the control of the Rs 95-crore Caparo Maruti just changed gears. On June 8 and 9, 2005, two police officers from Kolkata's Alipore Police Station raided Rajendra Bhavan, Caparo Maruti's registered office on Deen Dayal Upadhyay Marg in New Delhi. The cops, acting on the orders of the Judicial Magistrate, Alipore, seized several documents; but the most important ones-the books containing the minutes of board meetings and the register of members-were not available. Registered offices are required to maintain these books under the Companies Act, 1956. Jindal claims the minutes will substantiate his charges of forgery and criminal conspiracy against Paul.

Earlier, on May 31, 2005, Paul's crack team of lawyers, led by Arun Jaitley and Rajiv Nayar, heard the Delhi High Court dismiss his petition seeking the quashing of Jindal's criminal complaint (which alleges diversion of funds and criminal conspiracy for backdating the minutes). "It's sufficient to say for now that an offence has been made out and the complaint cannot be quashed," the order says. Paul, son Angad, and key executives will have to seek bail at the Patiala trial court, New Delhi, on July 15.

The Delhi-based Caparo Maruti, which supplies chassis and dashboards to Maruti Udyog, is a joint venture between Paul (60 per cent stake), Jindal and Maruti (20 per cent each).

-Kumarkaushalam

OUTSOURCING
India Calling

Quasar's Dutt: Revolutionising design

It's another hurray for India. After Nokia and Elcoteq, it's the turn of Nasdaq-listed Primus to set up a manufacturing base in India. For starters, it has sub-contracted the entire design and development of its dual SIM card PTL 910 mobile phone to the Bangalore-based Quasar Innovations. The new phone, which will let users switch between service providers without switching off the device, has been in the works for six-seven months. After some final testing and certification procedures, it is expected to go into production sometime in July or August this year. Quasar officials inform that the manufacturing site will be somewhere in South India, but cite non-disclosure agreements for not revealing more. "I can tell you that the phone will be ready for production by July and mass manufacturing is likely to begin sometime in the second or third quarter of this year by an independent Indian EMS (electronic manufacturing services) company," says Ramakrishna Dutt, Managing Director of Quasar Innovations. "We are trying to revolutionise the concept of a virtual ODM (original design maker) and we eventually hope to devise 15 to 17 models," says Dutt, whose five-year-old company counts Motorola, Ericsson and Texas Instruments among its customers. "The biggest challenge," says Dutt, "was convincing Primus about India's viability as a mobile phone manufacturing base, compared to traditional venues like China and Taiwan."

-Rahul Sachitanand

The BT 50 Index
Everyone's happy, but a small correction is round the corner.

It seems that the stock market punters watch the progress of the monsoon more closely than the Indian Meteorological Department. And only because of its progress on the expected lines, the stock market could shrug off another major spike in international crude prices (it went back to $55 or Rs 2,420 before easing to $53 or Rs 2,332 a barrel now) and settle at very high levels. The bt 50 index has moved up to 259, very close to its all-time peak of 264. But with the end of futures and options cycles getting closer, expect the market to get into a short-term correction mode.

Our flagship free float methodology-based index-BT 50-has completed two years now. The free float methodology has several advantages: first, it considers only the value of stocks freely available in the market (after excluding the part held by promoters and other strategic investors) and the weightage assigned to individual shares is more representative than the market capitalisation-based methodology; second, it takes care of the perpetual selection dilemma regarding closely-held companies. For instance, the inclusion of these companies may distort the index based on total market capitalisation methodology, but dropping them altogether may reduce its representative character. The free float methodology facilitates inclusion of large closely-held companies but assigns them a lesser weightage. After the success of our broad market free float index (that the Sensex subsequently decided to adopt this is testimony to the efficacy of the free float method), we decided to launch sector indices using the same method. While the general index captures the overall movements (covering several sectors), sector indices capture the movements in individual sectors. All these indices have a common base period (January 1, 2002). The weightages are reassigned every quarter after companies declare their ownership details. The base value of all BT indices is 100.

-Narendra Nathan

CORPORATE
Taking Nokia To Court
A Pune-based start-up says Nokia stole its idea.

Nokia India MD Sanjeev Sharma

Three months ago, Nokia India launched a multi-media blitz to promote its marketing programme 'Capture Your Imagination'. Now, the country's first-ever mobile imaging contest has led to a criminal investigation against the multinational handset maker. The charge: stealing the MMS (multimedia messaging service) photo contest concept developed by Pune-based startup, One-A Communication Hub (One-A).

Acting on a complaint by One-A, the Chief Metropolitan Magistrate, Delhi (CMM), on April 19, 2005, directed the Deputy Commissioner of Police, Crime Branch, IPR Section, Delhi Police, to investigate the allegations and submit a report by August 28, 2005. The CMM's order notes: "...It is further stated that on September 9, 2004, Mrs Anubha Doshi, Partner (One-A) e-mailed her first proposal regarding the unique contest to Ravneet Phukela, Brand Manager, Nokia Multimedia, highlighting the benefits to Nokia by sponsoring the event (sic)." Says Vaibhav Gagar, One-A's counsel: "Between September 9 and October 20, 2004, One-A held detailed discussions with Nokia via e-mail." One such e-mail from Nokia Multimedia's Sheffali Chachi (dated September 18, 2004) to Doshi states: "Conceptually interested. Am forwarding to our regional MKTG/sales team to carry forward with you." Nokia claims it knows nothing about this criminal case.

One-A has also filed a civil suit against Nokia before the Delhi High Court praying for orders restraining it from going ahead with the photo contest and for damages of Rs 20 lakh. No interim orders have been passed in this suit. The case before the CMM will come up for hearing after the police submits its investigation report. Nokia's spokesman declined to comment as the matter is sub-judice.

-Kumarkaushalam