Bajoria targets Thapar too

"There are lot of grey areas in disclosure norms such as when a market operator starts buying equity in a company and it reaches five per cent or above," Ballarpur Industries Ltd (BILT) managing director Gautam Thapar said.

Every promoter would be interested in these issues to be sorted out, especially the ones who do not have deep pockets to shore up their holding or companies which have low market capitalisation.

He said that the market regulator should clearly define who the people "acting in concert" are in the case of an acquisition. Responding to a query that in case Bajoria offers the promoters these shares, Thapar said that he would examine the issue on its merits.

When asked about the financial institutions’ role, he said that though he has not got in touch with them, but the Unit Trust of India (UTI) would be concerned. BILT has an equity capital of Rs 72 crore after the merger of AP Rayons and Ballarpur Industries. The promoters hold 31 per cent in the company, while the FIs’ holding is around 32 per cent. Thapars’ business associates from Saudi Arabia, Al Murjan hold 16 per cent equity stake in the company.

The floating stock of the company is around 14 per cent, of which Bajoria reportedly has bought 9 to 10 per cent. "Our records show that he owns over three per cent in the company and the shares have been bought under the name Megacorp or Mega resources," he added.

But their may be shares acquired by other companies or his friends and relatives, which may add up to a greater figure. BILT had received communication from Bajoria in April claiming that he had picked up around 10 per cent stake in the company and he wanted a seat on the board.

After April, Bajoria has not communicated with the company on the issue. Though industry watchers term the move as a threat, Thapars are not exactly worried as they hold a substantial stake in the company. The Thapars feel that Bajoria may be planning to make a quick buck. BILT has already informed SEBI the existing share holding pattern of the company and that he holds over three per cent in it, he said.

Thapars hold the first right of refusal if their business associates Al Murjan group decide to offload their share holding of around 16 per cent in Ballarpur Industries Ltd to Bajoria.

Chairman Thapar said: "There is no possibility of any of the promoters selling their equity stake and if Al Murjan decides to sell, then we have the first option to buy the shares under the agreement".

Referring to Bajoria as a "green mailer", he said that this may be an easy way to get into Ballarpur which is doing well and on a turnaround path. "If Bajoria offers the shares he has acquired at a fancy price to us, he won’t get it," Thapar said, adding that "at the most we can pay a premium of Rs 2 on the market price". The market price of the scrip is hovering between Rs 57 to Rs 60.

He said that commodity shares are not in fashion at present but may become attractive later so Bajoria may wait till the price starts going up. The Rs 1452-crore company posted a net profit of Rs 68 crore for the year ended June 2000, a three-fold jump over Rs 21 crore registered in the corresponding period of the previous year.