Financial Daily from THE HINDU group of publications
Tuesday, Jul 06, 2004
Corporate - Corporate Disputes
Polaris files counter claim against Indonesian bank Arbitration proceedings to begin soon
Chennai , July 5
ARBITRATION proceedings on the commercial dispute between Polaris Software Lab Ltd and Bank Artha Graha, Indonesia, is likely to proceed in the second half of 2004.
Pending the outcome of the case, the management is not able to estimate the financial effect of the contingency, says Polaris' 2003-04 annual report.
Following a commercial dispute, Bank Artha Graha failed to pay the monies due to Polaris under a contract and terminated the contract prematurely in November 2002. This dispute is now under arbitration at Singapore's International Arbitration Centre. Polaris filed the counter claim against the Bank Artha Graha, and is relying on the testimony of experts in the arbitration proceedings.
Polaris' management believes that the company can successfully resist the claim, the report says.
It may be recalled that in December 2002, the Indonesian Police jailed Mr Arun Jain, Chairman and CEO of Polaris, and a company official, based on a complaint filed by Bank Artha Graha. They were released after the Government of India intervened.
In a case related to the US-based firm Data Inc, Polaris said that it was contesting the case.
It believes that the allegations of Data Inc are without merit and have been proved by various orders of the court so far.
On a suit filed by ex-employees - Mr Harpal Dugal and Mr Suren Khirwadkar - against Polaris for wrongful termination of their services and publication of defamatory material,
Polaris said that since the case was in the preliminary stages, it is not possible for it to predict the case's outcome.
Invests Rs 18 cr in subsidiaries
POLARIS Software Lab Ltd had invested about Rs 18 crore in its subsidiaries and associate companies in fiscal ended March 31, 2004.
This includes an investment of Rs 9.95 crore in Optimus Outsourcing Company Ltd - a business process outsourcing firm - and Rs 4 crore in Polaris Retail InfoTech Ltd. In Empower Works Ltd, an associate company, Polaris invested Rs 2.90 crore during 2003-04, says the annual report of the company.
During 2003-04, Polaris made an additional investment of Rs 48.02 crore on fixed assets. This includes investments of Rs 24.68 crore towards development of "Intellect" suite of products for the banking sector, the report says.
As on March 31, 2004, Polaris' equity ownership in Empower Works Ltd was 49 per cent.
Empower, which provides human relations suite of software solutions and products, had accumulated losses of Rs 1.31 crore (as on March 31, 2004).
This was due to initial/start-up stage of operations and the company is expected to generate profits in the near future.
NMS Works, in which Polaris holds 45 per cent, reported an accumulated loss of Rs 93 lakh (as on March 31, 2004).
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