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Rediff.com  » Business » Swraj Paul's broker returns to haunt Shrirams

Swraj Paul's broker returns to haunt Shrirams

November 30, 2007 12:51 IST
Last week, when Harish Bhasin, the Delhi-based stock broker, made an open offer for DCM Shriram Industries Ltd, he was back in news after almost 25 years.

He had first shot to fame in 1983 as Swraj Paul's broker when the London-based businessman had mounted a takeover bid on Escorts and DCM (then known as Delhi Cloth Mills).

Sale and purchase of shares are in Bhasin's DNA. Hailing from a family that was amongst the founders of the Lahore Stock Exchange (now in Pakistan), 68-year-old Bhasin has twice served as the president of the Delhi Stock Exchange when it was a thriving market for stocks. With trading in the exchange falling to zero, Bhasin had quietly faded out of reckoning.

"Harish is living a retired life and is not on the company's board but comes to office when it is required", said someone who has known him closely. But, if the events of the last few days are anything to go by, Bhasin is very much active.

After Paul gave up the attempted takeover of Escorts and DCM in the mid-1980s, Bhasin was stuck with a 6-7 per cent stake in DCM.

Instead of selling it, he decided to hold on to it. After all, it was one of the largest conglomerates of that time with interests in textiles, chemicals, engineering, fertilisers and sugar.

In 1990, the Shriram family of DCM split. And Bhasin ended up with a 6-7 per cent stake each in DCM Shriram Consolidated Ltd (run by Ajay and VIkram Shriram), Siel Ltd (Sidharth Shriram), DCM (Vinay Bharat Ram) and DSIL (now managed by the sons of Bansi Dhar.)

Over the years, he is learnt to have liquidated his stake in all DCM splinter companies, except DSIL. In DSCL, he sold his shares to the Shriram brothers, who now own over 50 per cent of the company.

A source in one of these companies said that Bhasin would meet the management once in a while and make suggestions about the direction the company should take.

"As he was an important shareholder, we always noted his suggestions, though few were implemented," the source said.

In DSIL, Bhasin has gradually built his stake to almost 15 per cent. He has made an open offer for another 22.88 per cent, though he said it was not to destabilise the company's management. Tilak Dhar and his brothers are trying to block his move by issuing warrants to themselves.

Bhasin had challenged DSIL board's move to issue preferential warrants to the promoters at the Company Law Board (CLB) and moved the Delhi High Court when CLB refused to stay the issue of warrants.

Meanwhile, Bhasin's open offer price of Rs 70 a share has forced the DSIL Board to increase the price of warrants from Rs 52 to Rs 90 a share.

Following his setback at the CLB, Bhasin upped the price of his open offer by a handsome Rs 50 to Rs 120. And he seems to be ready to take the battle further, both legally and financially.

Interestingly, Bhasin's open offer move has brought cheer to the shareholders of DSIL, who are seeing an average 5 per cent jump in the share price every day. In the last one month, DSIL's share price has jumped by about 71 per cent.

Bhasin's opposition is to the DSIL promoters' move to allot warrants without calling a general body meeting of the shareholders.

"His basic opposition is to the concept of preferential warrants, which he holds wrong and wants companies and law-making bodies to think over the issue," said the source.

This is not the first time that Bhasin has thrown a scare at a businessman. In 2000, he had cornered around 12-14 per cent in Jaiprakash Gaur-run Jaiprakash Associates. But it came to naught.

Ajay Modi in New Delhi
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