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Thursday, October 19, 2000

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`ITC subsidiaries investing surplus funds only for profit'

Our Bureau

CALCUTTA, Oct. 18

THE two associate companies of ITC Ltd, New Deal Investments and Peninsular Investments, which are its investment arms, operate like any other fund manager, and are always looking for the best pick in the market, according to an ITC spokesperson.

And the clear objective is to make a profit on the deployable surplus for the organisation, not to acquire control over any corporate entity, he said, when asked about the acquisition of EIH shares by these arms.

Reacting to the market buzz over the two investment companies picking up a stake of less than 5.1 per cent in EIH Ltd (promoters of the Oberoi group of hotels), the official spokesperson for ITC said on Tuesday that the company had already lined up an in vestment of over Rs 2,000 crore in the hotels business in the next five years, and therefore, any acquisitions on the hotels front would be done in the most transparent manner.

He pointed out that deployable surplus funds were routinely invested by ITC in good scrips, and there may be several companies in which such investments could easily add up to almost five per cent. The checks and controls in ITC were firmly in place and information on market investments were promptly given to stock exchanges. Major decisions pertaining to acquisitions were strictly board-driven, and as per the corporate governance code now adopted by ITC.

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