Stalemate over FI divestment in MRL to continue

"I had submitted techno-financial proposals in January for acquiring the 44 per cent stake held in MRL by the FIs and will be issuing bids for the stake when the government decides on the reserve price," he said.

This is probably the first time that FIs, who are collectively the largest shareholders in MRL, have resorted to an open bidding route for selling their stake and have formally initiated an exercise which could possibly lead to a management change of an Indian company.

Another Modi group promoter V K Modi, who along with B K Modi already holds 20 per cent in MRL, has also submitted a separate individual bid for the FI stake, company sources said, adding at least three more companies had submitted similar bids.

Last month, shareholders had thrown a spanner in the divestment process when they dragged the FIs to the Monopolies and Restrictive Trade Practices (MRTPC) on the issue.

"Some shareholders have approached the MRTPC against FIs’ decision to sell the stake in Modi Rubber," chairman of IDBI G P Gupta had said. Gupta indicated that the FIs may have to wait till a final word from MRTPC is received. He, however, refused to divulge details.

Institutional sources had said that shareholders alleged in their petition that FIs were acting in connivance with other tyre manufacturers. Reportedly, domestic tyre companies like JK Tyres, Ceat Tyres, Continental AG and Apollo Tyres have submitted their bid with SBI Capital Markets to buy stake in the domestic tyre company.