Bajaj family seem close to settling dispute

Bajaj family seem close to settling dispute
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First Published: Fri, Dec 12 2008. 11 30 PM IST
Updated: Fri, Dec 12 2008. 11 30 PM IST
Mumbai: Share prices of Bajaj Auto Ltd and Bajaj Hindusthan Ltd, the flagship companies of the Bajaj family, rose sharply on Friday on speculation that two family factions might have reached a settlement in a five-year-old dispute.
The scrip of Bajaj Auto, India’s second largest two-wheeler maker, rose 10.39% to Rs393. The shares of Bajaj Hindusthan, India’s largest sugar maker, rose 5.4% to Rs48.8, beating the 0.46% rise in the benchmark Sensex index.
“We are definitely discussing and we have been talking throughout,” said Niraj Bajaj, managing director of Mukand Ltd, another Bajaj group company, who is negotiating on behalf of Rahul Bajaj, chairman of Bajaj Auto. “It’s (a settlement is) pending.”
This is the fourth attempt by the brothers to reach a compromise in the six-year dispute over the division of Bajaj group of companies and assets. Three previous attempts, in 2003, 2005 and 2007 failed to break the deadlock between Rahul Bajaj and his cousins on one side and Shishir Bajaj, the chairman of Bajaj Hindusthan, on the other.
Kushagra Bajaj, son of Shishir Bajaj, who is negotiating on behalf of his father could not be reached for comment. But a close aide of Kushagra said the “status hasn’t changed”.
At the heart of the dispute is the untangling of shareholdings in Bajaj Auto, Bajaj Hindusthan and other group companies between the brothers.
Following a messy fight since 2002, Rahul Bajaj and his associates agreed to sell their stake in Bajaj Hindusthan and Bajaj Consumer Care Ltd, which sells hair oil, to Shishir Bajaj and his family at a fixed price. In turn, the latter agreed to sell his 1.8% stake in Bajaj Auto, also at a fixed price.
However, a pact reached in June 2003 was not implemented due to undisclosed reasons. In the meantime, Shishir filed a lawsuit against his brother and cousins under Sections 397 and 398 of the Companies Act citing oppression and mismanagement.
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First Published: Fri, Dec 12 2008. 11 30 PM IST