Mumbai: Auto maker Bajaj Auto Ltd may not be too happy about its shareholder agreement with Allianz AG, but that has not stopped the German partner from wanting to increase its stake in their life insurance joint venture. Allianz says it brought in the capital and is now waiting to increase its stake to 49%. Edited excerpts from an interview with Kamesh Goyal, country head of Allianz and managing director and chief executive officer of Bajaj Allianz Life Insurance Co. Ltd.
Once the limit for foreign investment in (insurance) joint ventures is increased to 49%, would Allianz be increasing it to 49%? You’ve had some differences with your Indian partners.
No, I think there is a shareholders’ agreement between the two partners, which Bajaj Auto, when it demerged into three companies, openly declared...
Common ground: Allianz country head Kamesh Goyal.
The stock tanked because it was perceived to be in your favour, as Allianz?
I would say when we entered into this agreement, it was clear that the capital was brought in by Allianz, and both shareholders entered into an agreement with certain calls and options, which were priced at that time. I think any calls and options, if you look at on a pricing perspective, in hindsight you can always say that it was priced in favour of someone. But when you are entering into a contract, I think you are entering into a contract because both parties felt that it is fair. From Allianz’s side, we feel very strongly that with the kind of commitment which we have made and support which we have given, it’s only fair that we are able to increase our stake to 49%, according to our shareholders’ agreement.
But is there now common ground between the two partners on this particular stand?
Everything on this depends on the agreement that we have. So I think there is no view of one shareholder or another shareholder. The view is, what is there in the shareholders’ agreement..
There is something called litigation in this country.
No, I don’t foresee that... One of the biggest reasons for success of our two companies has been an exceptional understanding... I have been in this company for the last eight-nine years; I can’t think of any incident where either of the shareholders tried to go against the spirit.
One would argue that you perhaps were the only sensible insurer to have taken a call at that time which was different from others, because everybody else went on market value.
I think if you look at it, a lot of people at that time felt that what Allianz was doing was stupid, because they were bringing in all the capital. So I think it’s just a matter of perception, and by the grace of God and hard work of all the employees, I think (both) the companies have done well.