India Inc.'s Government

The country finally got a new Central Government, ending the speculation both about its identity and the nature of its formation. Seven days after the 15th Lok Sabha was formally constituted, a Bharatiya Janata Party (BJP)-led coalition government assumed power, with 14 allies in the government and another one supporting it from outside. Earlier, the formation of the government had been in jeopardy with the BJP unable to muster the requisite support from its allies, even as the Congress-I and the United Front declined to stake a claim for forming the government. The new government was given 10 days to prove its majority on the floor of the Lower House. While Atal Behari Vajpayee was sworn in as the country's 13th Prime Minister, along with a small Council of Ministers, the key portfolios--including the economic ministries--were to be allotted subsequently. The government announced that it would reconcile the divergent demands of its constituents through a common programme titled the National Agenda. While its contents were still being drafted, specific policy measures concerning the economy were not announced explicitly.

HLL

The stage was set for the face-off of the year as the Securities & Exchange Board of India followed up on its charges of insider trading against the Rs 7,820-crore Hindustan Lever Ltd (HLLl) by announcing that it will prosecute the company and five present and former directors, including present CEO K.B. Dadiseth and former CEO S.M. Datta. The company announced that it would appeal against the prosecution order, which indicts it for alleged gains made by trading in the shares of Brooke Bond Lipton before the latter's merger with HLL was announced.

Mideast

Breaking promises may not pay any dividends. The Additional Chief Metropolitan Magistrate, M.K. Gupta, ruled that the board of directors of the Rs 265.90-crore Mideast India, including the ICICI nominee, could be held responsible for non-payment of the dividends declared by the company at its annual general meeting on September 18, 1995. The long list of accused also included managing director Rita Singh.

Modi Rubber

The Rs 1,140.78-crore Modi Rubber's skid continued. It announced a loss of Rs 25 crore for the 15-month period ended September 30, 1997. The bleeding balance-sheet had the financial institutions (FIs) screeching in protest. The FIs set up a three-member body to offload their stake following the recommendations of the Basudev Sen Committee. The promoters, B.K. Modi and V.K. Modi, hold 13 per cent, while 44 per cent is with the FIs.

HCL-Compaq

In a dreary encore, three of the country's PC majors began yet another war of prices and accusations among themselves. The Rs 649-crore hcl Infosystems and the Rs 529-crore Hewlett-Packard India accused Compaq Computer of misleading consumers and offering a low-priced product with outdated technology. The war erupted over Compaq's advertisement for its Deskpro 1000 model, priced at a low Rs 39,990, without including the cost of the monitor.

J&J-P&G

Raising lots of lather, but little else, the Rs 420.25-crore Johnson & Johnson continued haggling with the Rs 415.80-crore Procter & Gamble (P&G) India to acquire Mediker, the latter's Rs 7-crore medicated shampoo brand. P&G India had put Mediker, along with Ezee liquid detergent and Trilo detergent bar, on the block in 1997 in a bid to concentrate on the feminine hygiene product Whisper and the cold-rub Vicks. The Rs 721-crore Dabur India and the Rs 413.10-crore Marico Industries also expressed interest in the brand, which carries a price-tag of about Rs 14 crore.

M&A Funds

Funding the M&A game acquired a new fillip, as the $28.86-billion Hongkong & Shanghai Banking Corp. and the $32.60-billion CitiBank announced plans of setting up takeover funds, with a corpus of $1 billion each, for financing acquisitions as well as defences against takeovers, and applied to the Reserve Bank of India for permission. The foreign banking majors are not the only entrants in the M&A financing business. The Rs 9,004-crore Reliance Industries said it may set up a Rs 500-crore fund for the same purpose.

Rice Tec

The patent controversy acquired a new twist with a recent pronouncement made by the US government. Clarifying her country's stand on the Basmati rice patent, acting assistant secretary of state for oceans and international environmental and scientific affairs Melinda Kimble said that the patent for the popular Indian rice variety granted to the US corporation Rice Tec can be revoked. The statement should help India's case.

M&M

The price-wars moved into second gear in the automobiles market as the Rs 3,602-crore Mahindra & Mahindra (M&M) slashed the price of its recently launched Voyager van by Rs 38,000 to Rs 4.79 lakh. The company said it was passing on the benefits of lower cost of raw materials, accruing from cheaper prices of auto-components in the troubled South-East Asian economies. The van will be Rs 15,000 cheaper than its competitor, the Rs 10,073.70-crore telco's Tata Sumo.

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