The ICA ruling will have a series of positive implications for LML and is a major setback to Piaggio's attempts to restrain the Indian scooter major's business activities. LML has informed the stock exchanges and the financial institutions about the ICA ruling against Piaggio.

In its application to ICA, Piaggio had originally sought injunctions on five accounts. It wanted ICA to: (a) prohibit LML from procuring and utilising technology from Benelli SpA of Italy and Daelim Motors of Korea or any other third party, (b) disallow direct exports by LML, (c) prevent LML from disclosing Piaggio knowhow and other confidential and proprietory Piaggio information, (d) allow the audit of LML by Piaggio and (e) direct LML to return to Piaggio all knowhow given by the latter and to immediately cease to usethe knowhow supplied for certain vehicles, including four-stroke scooter ET-4 and Skipper.

Piaggio, however, withdrew its plea for two injunctions related to LML procuring technology from Benelli, Daelim or any other third party and audit of LML by Piaggio. The ICA ruling has opened the doors for LML to commence exports directly, which it had been restrained to do and was exporting only through Piaggio.

LML's exports had significantly declined during the current year which are likely to be revived now. It will facilitate the launch of new vehicles by LML, including four-stroke motorcycles, scooters and scooterettes, including that of Daelim, Benelli and Piaggio origin. LML will also be able to source and improve technology aspects for upgrading its product line, specially conventional scooters, which have seen a rapid decline as a segment over the past one year.

INSIGHT
Market to react positively

The long-drawn legal battle between the Singhanias and their Italian partner has led touncertainty regarding LML's operations. The stock has been on a downward journey right since May 1998, when it quoted at around Rs 160 and has been moving within the Rs 50-60 range since May this year. As the ICA ruling has positive connotations for LML, the markets can be expected to react favourably to the news. However, it needs to be borne in mind that the scooter market has been contracting, with sales down 11.2 per cent for the April to July period. Even market leader Bajaj auto has seen its stock fall. So a rally in the stock could be short-lived. The stock closed at Rs 52.45 on the BSE on Friday.

-- Sarad Saraf