Sucheta Dalal :A Total solution (27 August 2001)
Sucheta Dalal

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A Total solution (27 August 2001)  

DSQ Software, which has recently moved from controversy to suspension of its shares, and investigation into its activities, is set to assume a new name and personality. An email communication from Dinesh Dalmia to its employees says that since the company will now be ‘offering a total bandwidth of IT solutions, we are re-naming our company to reflect our services offerings, from now onwards the company will be known as Total Systems’. Dalmia says that until now all group companies such as—DSQ Software, Global Software, e-Antarix Applications and Total Infotainment had independent global sales set ups leading to high group sales cost. Total Systems will apparently combine group sales at one point and avoid duplication of marketing effort. It will also offer a ‘full bandwidth of IT services along with software services’. While the changes and new visiting cards and email ID for staff are going to be applicable from August 31, 2001, the ordinary shareholders of the Dalmia companies seem unaware about the name change. Dalmia is clearly confident that he will face no opposition from investors or the regulators. In the meanwhile, some members of the Joint Parliamentary Committee have demanded that the Enforcement Directorate conduct an investigation into the three Mauritius-based companies which were allotted a chunk of shares through private placement for acquiring US-based Fortuna Technologies.

Watch out for dabbawalas

There is no end to the gullibility of small speculators in the Indian market. Ever since Sebi has introduced rolling settlements in order to check unbridled speculation there has been a big drop in trading volumes in the official market. As a result, a new class of intermediaries who are called ‘dabbawalas’ have sprung up to create a market for illegal speculation. These dabbawalas, buy and sell shares on behalf of gullible investors, with themselves as counter-parties. It allows rampant speculation, cash payments, no margin requirement or regulatory oversight. The dabbawalas in collusion with large brokers can easily influence price discovery on the official market and thus attract more investors. It will just be a matter of time before a large unofficial market, like the one at Kolkata springs up in Mumbai. A reader points out that a majority of these dabbawalas, unsurprisingly, are defaulter brokers of different stock exchanges. Both investors and the regulators have to check this new development before it destroys the market again. Investors could do well to remember the losses and suicides at Kolkata before their greed overtakes common-sense; the regulator too needs to crack down on every irrational rally (the recent burst of activity in Balaji Telefilms would be a good example) and order immediate broker inspections to track their clients and source of funds.

Nedungadi in play again

Nedungadi Bank first shot into the limelight when the late B Ratnakar, former chairman of Nedungadi Bank tried to take it over and has remained notorious ever since. Recently, the Reserve Bank of India inspection unearthed serious violations in its lending operations and the fact that a Mumbai-based broker seems to have a stranglehold on its management. Barely has the dust settled down and another group of shareholders is attempting to gain control. As a first step, these Gujarat-based shareholders have served a notice for an extraordinary general meeting (EGM) to appoint two new directors to the bank board. One of the would-be directors is the founder of a small bank based in Anand. The group is busy canvassing support for their candidature at the meeting, which is just a couple of days away. However, other shareholders are perplexed at the tearing hurry with which the group wants to put itself on the board when the bank is still under RBI scrutiny. Or, maybe they are confident that the RBI, which has been napping over supervision, has gone to sleep again.

Tailpiece: Every old building, it is said, has its own resident ghost. JRD Tata for instance was convinced that the sprawling bungalow in Pune which now houses the Tata Archives and the Tata Management Centre had a ghost—it was one of the reasons why he avoided going to Pune for bridge-weekends with AD Shroff and others. Now employees of the spanking new IL&FS building at Bandra-Kurla complex believe that a female ghost taken up residence there. The apparition is allegedly spotted on the tenth floor offices whose galleries look down on the steep atrium or the jogging track on another floor. While there are those who truly believe in the ghost, the wags wonder if it is the imposing, granite-covered monument like proportions of the building which attracted a stray spirit. Others wonder why it should choose the 10th floor (which houses ILFS) and not the two-level basement which is probably a better location to scare ordinary mortals.

-- Sucheta Dalal