New Delhi/ Mumbai: A five-year dispute over the division of the Bajaj group of companies and assets between the promoters comes up for its next hearing before a quasi-judicial arbitrator today, after both parties requested time to reach an out-of-court settlement and have apparently failed in that endeavour.
Lawyers for the warring Bajaj brothers, Rahul Bajaj, chairman of Bajaj Auto Ltd and his cousins on one side and Shishir Bajaj, the chairman of Bajaj Hindusthan Ltd on the other, will either argue their case before the Company Law Board (CLB), or seek more time.
Both groups maintain that they are keen to settle the matter out of court but as of Sunday, little headway appears to have been made.
“We are hoping to tell the CLB that we made a final offer to Shishir, about 10 days ago, which, in our opinion, is an excellent offer,” said Rahul Bajaj in a telephonic interview. “Unfortunately, it was rejected and hence we have no choice but to wait for the CLB hearing where we are sure justice shall be done.”
Rahul Bajaj, chairman of Bajaj Auto Ltd
A spokesman for Shishir Bajaj declined to comment. As is the case in any normal court case, both sides have the right to appeal if they are not happy with the decision that the CLB might make.
This is the fourth such attempt to reach a compromise. Three previous attempts, in 2003, 2005 and earlier this year failed to break the deadlock, which involves a division of assets.
At the heart of the matter 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, one of India’s largest sugar producers and Bajaj Consumer Care Ltd, which sells hair oil, to Shishir and his family at a fixed price. In turn, the latter agreed to sell his 1.8% stake in Bajaj Auto, India’s second largest two-wheeler maker, also at a fixed price.
However, this agreement, which was reached in June 2003, was not implemented because of as yet undisclosed issues. In the meantime, the stock prices of group companies have risen and Shishir who would have netted Rs71 crore at the initial prices is said to have demanded more compensation.
The latest salvos was fired by Shishir Bajaj, who hiked his stake in the family-owned sugar company by 4.7% a month ago, even as he terminated the 2003 agreement formally. Shishir’s move was in response to Rahul and his associates trying to induct Sanjiv Bajaj, his younger son, and Niraj to the board of Bajaj Sevashram Pvt. Ltd, an investment company that has shares in most of the group companies.