Search the Internet          Tips  Sites: Finance, Investment

Bajoria to sue Bombay Dyeing over buyback

Kausik Datta

Jute baron Arun Kumar Bajoria said Friday that he will legally challenge Bombay Dyeing & Manufacturing Company's proposal to buy back shares before the proposed resolution to this effect is tabled at the annual general meeting on July 23.

Bajoria's statement comes within hours of the decision by the Bombay Dyeing board to buy back shares up to a limit of 25 per cent of the total equity capital from the open market at a maximum price of Rs 60 a share.

"The proposal of buying back of shares is nothing but a trick of the Bombay Dyeing management to extinguish shares which were parked with company chairman Nusli Wadia's friends and associates. They bought shares equivalent to 10 per cent stake of the company from my firms. They also purchased shares representing nearly three per cent stake from the open market," he alleged.

At one point of time, Bajoria had held nearly 15 per cent of the equity of Bombay Dyeing, of which he sold off 10 per cent in tranches. Bajoria's average sale price was around Rs 95 a share against his purchase price of Rs 65.

His contention is that the buyback offer will be used to extinguish the shares he had sold off, but at a price that will not attract minority shareholders.

Bajoria claimed that the buyback proposal actually gave credence to the case he has filed before the Company Law Board. His petition alleges oppression of minority shareholders by the Wadia management. The case will come up for hearing in August.

Bajoria, who holds 2 million shares of Bombay Dyeing at present, said he will not offload his stake despite the buyback offer.

If the buyback offer is fully subscribed, his holding in the company will go up to 6.49 per cent from the current level of 4.87 per cent.

Powered by

YOU MAY ALSO WANT TO READ:
The Rediff-Business Standard Special
The Budget 2001-2002 Special
Money
Business News

Tell us what you think of this report