Pirated ILD: Lost time

It exists, therefore, they steal. It's a simple, if warped, Cartesian logic that explains why a staggering billion minutes of international long-distance (ILD) telephony are ''stolen'' each year by illegal operators. According to industry estimates, the three ILD providers-VSNL, Bharti Telesonic, and Data Access-carry only two-thirds of international calls terminating in India. The rest comes in through pipes meant for carrying data, or via call-centre operators, who pass it on to BSNL and MTNL as local calls, robbing them of crores of rupees. Reason: the two companies get anywhere between Rs 3 and 13 for every legitimate ILD call they terminate. The pirates pay zilch. The ILD operators also lose an estimated $100-150 million (Rs 480-717 crore) annually in revenues. ''The only solution,'' says Siddharth Ray, MD, Data Access, ''is better vigilance by law enforcement agencies.'' Or for ILD rates to close the gap with those of the grey market.

-Vandana Gombar

CLEAN INC
India's Sarbanes-Oxley
It's long in coming, but when it does it should make corporate governance more effective.

It's been three years since the Kumar Mangalam Birla committee on corporate governance submitted its report, but India is yet to get its own Sarbanes-Oxley Act like what the US introduced last year in the wake of a rash of accounting scandals. The hurdles: a number of acts, including the Companies Act and the Securities Contract Regulation Act, need to be amended before the Committee's recommendations can be enforced.

But just how will an Indian Sarbanes-Oxley look? First, it is expected to bring more control at the management level. At least half of the board will be made up of independent directors. An audit committee may become mandatory, and a separate committee headed by a non-executive director will redress shareholder grievances. More importantly, it will require companies to disclose more information-about executive remuneration and various committee meetings. Now, all that investors have to do is wait for it to come through.

-Narendra Nathan

VC-WATCH
Is Carlyle Alive Again?
Yes, if its new investment in a BPO company is any sign.

Kanwaljit Singh: We were never cold

After playing dead for 18 months in India, Carlyle Asia Venture Partners woke up in February with a bang, announcing that it was investing $4 million (Rs 19.20 crore) in Worldzen Holdings, a Bangalore-and-Chicago-based BPO company. Says Kanwaljit Singh, Vice President, Carlyle India Advisors: ''We were never out of the market, only watching developments and honing our strategy.'' So what's the new strategy? For starters, it means no more investing in internet pure-plays. Rather, the focus will be on it-enabled services, semiconductor design, value-added it services providers, and storage software solution. Besides, the fund is now looking at companies with an existing profitable model, but expanding. Says Singh: ''The India proposition is even more attractive and we will fund companies that can deliver them.''

Although Carlyle's dotcom investments might have to be written off, Singh feels exit options will be available in some of the other investments. In fact, that may well determine how far Carlyle's second wind takes it.

-Venkatesha Babu

ROW
Stubbing It
The government finally okays the ban on tobacco advertising. Ouch!

Everybody knew it was coming, except that the speed with which it hit them has caught them off guard. We are talking of The Cigarette and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade, Commerce, Production, Supply and Distribution) Bill, which has been approved by the Cabinet and will be notified in the current budget session. This not only bars the Rs 10,000-crore cigarette industry from advertising, but also restricts retail. Says Kurush Grant, Head of ITC's tobacco business: ''States like Goa and Delhi already have a ban on tobacco ads, so that doesn't worry us. But restricting outlets and points of sale is an issue.'' The industry fears that this may encourage sale of contraband cigarettes, and load the dice against legitimate cigarette sales, which for just 16 per cent of tobacco consumption, but 85 per cent in terms of value. While the industry in general does not expect any great reverses in the short term, what is a concern is business in the long term. And there are no easy answers here.

-Debojyoti Chatterjee

Q&A
''The Merger Has Transformed The Group''

Jean-Pierre Durant des Aulnois: Talent warrior

As the world wide head of Cap Gemini Ernst & Young's People Relationship Management (read: HR), Jean-Pierre Durant des Aulnios oversees an army of 55,000 consultants across more than 30 countries. In Mumbai recently, the Paris-based Des Aulnios spoke to BT's Dipayan Baishya about CGEY's merger and India opportunities. Excerpts:

In May 2000, Cap Gemini, Gemini Consulting and E&Y Consulting merged, followed by a slump in consulting. Was the merger a bad idea?

The merger has completely transformed the group in two respects. One, in terms of size and the other, in terms of geographic coverage, where we were complementary. Internal skills, or what I call disciplines, were very complementary too. Yes, the market for consultancy services did enter a downturn soon after the merger, but I do believe that nobody thinks the merger was a mistake.

How does CGEY look at India and the talent it has to offer?

India for us is part of a successful geography, Asia Pacific, and we are doubling in size here every year since 2000. We are looking at India as a part of a very global group in all dimensions, and in fact, a lot of our team members here are working on projects outside the country.

What do you mean when you say CGEY is an "employer of choices"?

It started because every year magazines started selecting companies as employers of choice. We said we wanted to be seen from the employee's point, we wanted to be employer of choices. Choices in terms of mobility, choices in terms of industry sectors, choices in terms of profession and we were ready to provide these. That is the way to look at it.

CPR
A Flicker Of Hope
Two of Dabhol Power Company's beleaguered promoters seek to revive the ill-starred project.

Dabhol Power Plant: A new beginning?

Barely 24 months after it went live, the ill-fated Dabhol Power Company downed shutters after main promoter Enron filed for bankruptcy. But with $2.1 billion (Rs 9,644 crore) sunk in the ground, the other promoters-GE and Bechtel-have come up with a revival plan: To increase their holdings (10 per cent each), and rope in NTPC to replace Enron, which owns 80 per cent of the equity. "The proposal looks practical and it is in everyone's interest to revive this power project," says Power Secretary R.V. Shahi. "But," he adds, "there are some issues to be sorted out."

That primarily relates to DPC's power tariff. The Maharashtra State Electricity Board (MSEB) wants the effective price per unit to be lowered from Rs 5.20 to Rs 4, and to pick up 70 per cent-and not 90 per cent as in the original agreement-of the power generated. If NTPC does agree to the plan, DPC will not only get a new operator but also an investor willing to renegotiate with MSEB. But that is a big if.

-Debojyoti Chatterjee