Different strokes

MSEB8217;s crackdown

Armed with a decision from the Maharashtra cabinet, Yashawant Bhave, Chairman of the loss making Maharashtra State Electricity Board MSEB iscracking the whip to recover electricity arrears. Firstly, MSEB has startedmopping up the additional deposits which it had neglected to collect fromdomestic subscribers over the years. Secondly, it is taking another look atthe night- time supply of cheap power at Rs 1.80 to certain ferro-manganese companies from NTPC. This was a concession that a few companies had wrangled through the central government. Finally, it has begun to talk tough with the defaulters including steel companies such as the Mittals, Lloyds Steel and other ferro-manganese producers. The first condition is no outstanding on current bills and a programme for clearing arrears within a specific timeframe. Though MSEB8217;s crackdown against defaulters clearly demonstrates its determination to recover money, it is still the easier part of its job. The more difficult part is yet to begin 8211; that is the MSEB management8217;s ability to withstand political pressure.

Corporate houses that are under pressure to pay up have already begun to approach their political friends. On top of their agenda is a nearly impossible demand that the fund starved MSEB should cut subsidy to farmers so that the cost of electricity for everybody reduces significantly.

Ice says no to subsidies While politicians and subsidies are MSEB8217;s problem areas, an equally difficult issue is dealing with corruption within its own ranks. At a recent seminar, the Bombay Ice Manufacturer8217;s Association demanded stoppage of quot;widespread power pilferagequot; in the ice industry and action against corrupt MSEB officials. Ice manufacturers who use of high-tension power allege that several ice manufacturers in Mumbai8217;s industrial suburbs which cover Kalyan, Ulhasnagar, Belapur, Taloja etc. have bribed MSEB officials to illegally split loads and are using ineffective meters to pilfer power. The Bombay Ice Manufacturers8217; Association wants the MSEB to immediately install electronic meters in these areas; introduce extra vigilance at nights and on holidays to stop theft and prosecute those responsible for the thievery. It has also demanded that no ice factory should be allowed low-tension connections at all. Since power is the most expensive input for ice manufacture, rampant power theft damages theprofitability of units which are correctly charged. It is thus the rare industry which is urging MSEB not to subsidise power; and asking it to levy the same commercial rates charged by BEST and BSES within the metropolitan area. An example of how tough competition forces transparency and attacks corruption.

Nothing doing say MFs

Remember how the market watchdog had decided that Mutual Funds wouldhave to maintain precise and detailed records of their investment decisions?Apparently, most Fund Managers have flatly refused to comply with SEBI8217;sorders. Some waffled, but refused to follow SEBI8217;s diktat while othersargued with their own Compliance Officers about how impossible it was tocreate such detailed documentation. The upshot is that the powerful fundmanagers have had their way with the regulator and a compromise has beenarrived at. While there will be no official announcement, SEBI will not insist on the documentation order being complied with either. Had Infosys happened today Infosys the darling of the stockmarket and one of our most ethically run companies is the biggest triumph of venture financing in India. But if Infosys were to happen today, after the tax authorities have decreed that venture financiers should divest their stake within 12 months and the story would be very different. Its venture financiers would be on the verge of harakiri. Infosys first went public at Rs 95 a share in 1993, its lead managers struggled to have it subscribed. Soon after it was listed at Rs 145 and in the next 12 months when the share was quoted just a little higher the venture capitalists would have had to exit. With the shadow of divestment hanging over the share price, it would never have moved beyond Rs 95 let alone gaining enough momentum to allow a private placement to FIIs at Rs 450 in 1994. Infosys would have gone fromstrength to strength, but venture capital would have stayed clear of India.

Author8217;s email: suchetadalalyahoo.com