The warring Bajaj brothers, Rahul and Shishir, have finally decided to terminate a family settlement agreement after prolonged peace talks for which they had also sought additional time from the Company Law Board (CLB).
A day after accepting termination of the memorandum of understanding
(MoU) reached by the two sides in 2003, Shishir Bajaj went on an offensive by increasing his stake in Bajaj Hindusthan Ltd (BHL), a company in which the opposition camp of brother Rahul had also hiked his stake earlier this year.
Shishir Bajaj, chairman and managing director of the country’s largest sugar maker, consolidated his stake in the company to 45.65 per cent through open market purchase, by picking up an additional 4.75 per cent for an estimated Rs. 123.48 crore.
The company’s share price closed nearly 10 per cent down on the Bombay Stock Exchange on Thursday at Rs. 170.35.
The move comes a day after Shishir Bajaj’s lawyers informed their counterparts in Rahul’s camp about agreeing to end the June 2003 settlement agreement which was never implemented.
“Your client’s breaches of the family settlement has caused prejudice and loss to our clients,” Shishir Bajaj’s lawyers said in a letter to Rahul camp, agreeing to end the pact.
“...Our clients having spent significant time and huge amounts in seeking enforcement and implementation of the family settlement in regard to which our clients reserve the right to adopt appropriate proceedings as they may be advised,” they said. According to the MoU, Bajaj Hindusthan and Bajaj Consumer Care Ltd was supposed to have gone to Shishir Bajaj.
According to the letter sent by Shishir Bajaj’s lawyers, Rahul Bajaj had purported to terminate the agreement on October 17, 2006. When contacted, Rahul Bajaj declined to comment saying he had not seen the letter. Shishir Bajaj’s side was also tight lipped on the issue, stating that the matter was already pending before the CLB.
Earlier in March this year, Rahul Bajaj’s camp increased stake in Bajaj Hindusthan to 11.9 per cent, as part of “treasury operations”. This was decried by his nephew Kushagra Bajaj, who said it smelled of a hostile takeover.