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July 9, 1997


Tata IBM, Intentia cut relations with Advent

TATA IBM Limited, till recently known as Tata Information Systems Limited, has snapped its business partner agreement with Madras-based Advent Computers Limited.

Intentia of Sweden, one of IBM's eight preferred application software vendors, has also severed its marketing ties with Advent.

Tata IBM Managing Director Ravi Marwaha has been quoted as saying that the agreement was terminated as Advent was not performing up to expectations.

"We have set high standards for our business partners, but I am afraid that Advent did not meet them," he claimed.

Advent Computers Managing Director Michael Arul alleged that Tata IBM owed Advent Rs 35 million, towards 'marketing services'. He did not elaborate on what these services were. Against this, Advent owned only Rs 3.5 million to Tata IBM, according to Arul.

Marwaha, however, denied this. "Advent has taken some equipment from us under the old business partner agreement, but has not yet paid for it. A few hundreds of thousands of rupees are due from Advent for some months now. We are examining all possible ways to recover the dues."

Sources at Advent, who initially denied that Tata IBM had terminated the agreement, later said that they wee unaware of the reasons for the termination. Advent, however, continues to use the IBM name in its operations, despite Tata IBM snapping links with it.

Under the agreement, Tata IBM had earlier appointed Advent to remarket its range of AS/400 systems, OS/400 operating systems and related programs. The reasons for the Advent-Intentia tieup turning sour, are now known. Advent had earlier entered into a tieup with Intentia to exclusively market Movex, a software for manufacturing and distribution applications in India.

Sources at Advent said Intentia did not fulfil its training obligations. This triggered the breakup, they alleged. In his reply, Arul said that patch-up negotiations are on with Intentia. The talks also involved in a sizeable investment by Intentia in a joint venture with Advent, he claimed.

Recent developments at Intentia do not back up Arul's claims. According to unconfirmed market reports as also from Movex users, Intentia has made a clean break with Advent and is on the verge of appointing Microtech, Bombay, as their new distributor for Movex.

Sources at Advent conceded that they were aware of this development but were still hopeful of an amicable solution with Intentia. They, however, felt that the chances of a patch-up with Tata IBM are bleak.

In another unrelated development, Fortune Communications, Advent's advertising agency, has initiated criminal proceedings against Arul for dishonour of cheques issued to clear dues. Arul, however, held Fortune responsible for the poor response to Advent's public issue!

It may be mentioned that the Advent public issue in November 1995, at a premium of Rs 10, was not fully subscribed. Company officials concede that the promoters indirectly pumped in money to push the issue through.

- Compiled from the Indian media

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