Bajajs close to settling family dispute

As per the agreement—now in its final stages—Shishir Bajaj would sell his 6per cent stake (worth around Rs 400 crore) in Bajaj Auto to his elder brother, Rahul Bajaj at the price to be decided by the mediators. He will also get complete control over two group companies in which he has been working thus far, that is, Bajaj Hindustan and Bajaj Sevashram.

When contacted, Rahul Bajaj, CMD of Bajaj Auto denied any settlement reached as of today. “All of us (five Bajaj brothers) are wishing for a quick settlement. As things have reached crucial stage, I can not comment beyond that.”

Insiders say Bajaj settlement has been cleared by the lawyers of both sides and now it has reached the mediators, NCP leader Sharad Pawar and family friend Dheerajbhai Mehta for final clearance.

Rahul Bajaj has already indicated that his elder son, Rajiv will take over as the managing director of Bajaj Auto from him by May 2005 while he will continue to remain as the chairman. Rajiv is expected to take over as joint managing director in the annual general meeting of shareholders to be held this year.

Rahul’s younger brother Shishir was not happy with the marginal role played by him and his son, Kushagra in the Bajaj Group. Hence, the split.

The settlement would also take care of the cross-holdings of various trusts and companies owning shares in Bajaj Auto and Bajaj Hindustan.

While Shishir, who personally owns 1.5 per cent in Bajaj Auto and controls rest through Bajaj Trusts, will disinvest in Bajaj Auto, Rahul Bajaj and his three other brothers will sell their stake in Bajaj Hindustan and Bajaj Sevashram.

The Bajaj family was split with Shishir Bajaj on the one side and Rahul Bajaj, Neeraj Bajaj, Shekhar Bajaj and Madhur Bajaj on the other. The promoters and persons acting in concert hold about 29.17 per cent stake in the company and have the option open to increase their shareholding every year under the promoter’s creeping acquisition norms.

Reflecting the optimism of a settlement, on the Bombay Stock Exchange, the share price of Bajaj Auto has been going up since October last year to touch Rs 495.25 as on Friday.