Sucheta Dalal :Generous Ranbaxy (22 October 2001)
Sucheta Dalal

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Generous Ranbaxy (22 October 2001)  

Among the many things that India is rushing to offer unasked to the United States, is External Affairs Minister Jaswant Singh’s generous offer of $1 million worth of Ciproflaxacin—the antidote to the dreaded anthrax. No, Singh does not plan to procure his gift from Bayer—the company that holds the US patent for anthrax. Instead he will source it from Ranbaxy. If the US accepts the gift, it would again prove that its interests and needs come way ahead of any sanctions or World Trade Agreements. With Canada having already decided to ditch the World Trade Organisation conditions, the US may be tempted to follow its lead. If it does, the large US market will open up to at least three Indian companies.

Check these volumes

Now that the finance minister has decided to become ‘hands on’, one can bring issues directly to his notice. Take for instance the huge volumes in two information technology scrips—HCL Technologies and NIIT. Market reports say that a big bull operator is pushing the stock and day traders, starved of trading opportunities in the last few months have been driving volumes and prices. NIIT has risen nearly a 100 per cent in one month from Rs 87.60 (National Stock Exchange) on September 21 to Rs 162.85 on October 19. The volume on October 19, was 64.86 lakh shares; in comparison Reliance traded only 28 lakh shares that day. Even in early September when the price range was around the same, the volume averaged just around ten lakh shares per day. What is happening since October 10, for volumes to shoot up to over 25 lakh shares everyday, going up to last Fridays record high? It is the same with a group company HCL Technologies.

The high volume action in this scrip began in August this year. Roughly 20 to 30 lakh shares were traded everyday. Suddenly on September 20, a huge 78 lakh shares changed hands. On September 26, this number rose to a huge 144 lakh shares and on September 27, a phenomenal 234 lakh shares were churned. The high volumes continued until October 9, when 243 lakh shares were transacted after which it dropped dramatically to around 47 lakh shares last Friday. Such volumes usually indicate involvement of a large operator or change in holding of the promoter group. Will someone tell us what is going on, especially since other fancied scrips such as Satyam and Infosys showed no such drama in the same period.

Trading with KP

Just a year ago, the largest business paper in the country was singing peans in his glory: ‘the sensex moves in the shadow of the trail he blazes’ gushed the paper, describing Ketan Parekh as ‘the man who is credited with conducting the orchestra as tech stocks rose to a crescendo...’ Today those who dealt with him, and four others will be scurrying to their document cupboards to check if they have had any dealings with him and his uncle between April 1, 1991 to June 6, 1992. These include all firms, banks, companies, individuals, mutual funds and others and the deals include any contracts, shares, debentures, units or property. After nine long years, the custodian appointed by the special court in 1992 has suddenly chosen to notify Ketan Parekh who is a close buddy of Harshad Mehta and his brother Ashwin. For those who have forgotten the events of 1992, here is an update.

The custodian appointed under the Special Courts Act to hasten the trial and investigation of the Securities Scam offenses attached the properties of 35 notified persons in 1992. And those who had dealt with these notified entities had to inform the custodian and even bonafide transactions required a cumbersome certification procedure to avoid confiscation. It will be interesting to see how the custodian, who has woken up after nine long years, goes about collection information about what happened in another century.

Protecting investors

Ever since the new Companies Act proposed the creation of an Investor Education and Protection Fund (IEPF) out of unpaid dividends, share application money, and debenture redemption funds (which languished with companies for seven years or more) there have been various estimates about how much of money would actually flow into the Investor Education and Protection Fund coffers to protect investors. Estimates varied from Rs 100 crore to Rs 300 crore and sometimes even a fanciful Rs 700 crore plus. Two years later the matter is more or less decided. The money will go into the Consolidated Fund and the Investor Education and Protection Fund will only get what it confidently hopes to be able to spend. The first years estimate? Rs 5 crore. However, it will be more interesting to see whether the IEPF finds sensible takers even for this small sum.

-- Sucheta Dalal