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Bajajs end their feud
Sanjay K Pillai & Arijit De in Chennai/Mumbai |
June 13, 2003 14:10 IST
The feud between Rahul Bajaj and his younger brother Shishir has been resolved, mediated by S Gurumurthy, the Chennai-based chartered accountant and convener of the Swadeshi Jagran Manch.
"All issues relating to the split have been resolved on June 6," a source close to the deal said.
Under the broad terms of the agreement, which is expected to be inked soon, Shishir will buy his cousins out of the companies he controls and vice versa.
The Rahul Bajaj faction would pay close to Rs 400 crore (Rs 4 billion) to Shishir as the net difference in valuations, the sources added.
The difference arises out of the huge difference in the valuation of group flagship Bajaj Auto and the companies like Bajaj Hindusthan and Bajaj Sevashram controlled by Shishir.
The amount, however, is significantly lower than the Rs 500 crore (Rs 5 billion) that Shishir is initially understood to have asked for.
Sources said Gurumurthy was involved in the settlement since September 2002. "Gurumurthy initially met the entire family in September but backed out when Kushagra Bajaj, Shishir's son, filed a case. After this a journalist friend again requested Gurumurthy's participation. Suresh Neotia, chairman of Gujarat Ambuja, who is related to Rahul Bajaj, initiated contact with him on behalf of Gurumurthy and then Rahul Bajaj got in touch with Gurumurthy," the source said.
In March this year, Rahul Bajaj spoke to Gurumurthy and the row was sorted out in the first week of June. All talks relating to the mediation between the brothers were held in Mumbai.
Rahul Bajaj was out of the country and could not be reached. Shishir and Kushagra were unavailable for comment.
The differences in the Bajaj family came to light last year. Shishir wanted to take full control of the companies he manages: Bajaj Hindustan and Bajaj Sevashram. In return, he was prepared to part with his stake in Bajaj Auto and other group firms.
The Bajaj family and associates hold approximately 30-40 per cent in each group company, while the holdings are equally divided among Rahul, Shishir, Shekhar, Madhur and Niraj.
The two factions had also decided on two mediators -- politician Sharad Pawar and Dhirajlal Mehta, a family adviser. But the mediators were not successful in making the two sides arrive at a settlement.