Bajaj Auto’s decision to acquire an additional 1.9% stake in Bajaj Hindusthan has fanned the flames of the ownership dispute between Rahul and Shishir.
Satish John & Nandan Singh
MUMBAI: Bajaj Auto’s decision to acquire an additional 1.9% stake in sugar maker Bajaj Hindusthan has fanned the flames of the four-year-old ownership dispute between the brothers - Rahul and Shishir - who control the two respective companies. Despite a “settlement” hammered out by friends of the family some years back, the Bajaj family split is far from complete, with Rahul and Shishir yet to disentangle the shares held by each in the other’s companies.
Under the deal, Rahul was to hand over his holdings of Bajaj Hindusthan to Shishir and the latter his holdings of Bajaj Auto, but this has not happened, allegedly due to valuation issues on the respective shares.
Taking up cudgels on behalf of his father (Shishir), Kushagra Bajaj has come out in the open accusing his uncle of furthering the interests of his two sons - Rajiv and Sanjiv - while ignoring the interests of his nephews, including Kushagra himself.
Bitter sugar
* Kushagra Bajaj accuses uncle Rahul of intent to oust him from Bajaj Hindusthan
* Rahul says no question of ouster, and says nephew went overboard with criticism
* Planned split is far from complete due to failure to disentangle cross-holdings
“Rahul Bajaj has gone back on his commitment to honour the settlement,” alleges Kushagra. “Despite the passage of several years, the prospect of a family settlement appears to be even further than before”.
Kushagra, who’s married into the illustrious Birla family (his brother-in-law being Kumar Mangalam Birla) is credited with taking Bajaj Hindusthan into a higher orbit from being a mere small player in the sugar arena. Kushagra apprehends that his father and he will be ousted from the board of Bajaj Hindusthan since the share ownership is still to be untangled.
“He (Kushagra) has let his imagination run wild and thinks that we will oust him from the company. In fact, he is doing well for the company and I wish him all the best,” Rahul said at the sidelines of a CII conference held in Mumbai.
Rahul Bajaj, the patriarch of the family, who has always been outspoken in his views, was clearly flummoxed by his nephew’s strategy to take the family differences into the public domain (see page 22 for details of Kushagra’s statements). “I am surprised how Kushagra gave a statement to the press,’’ Rahul Bajaj admitted. ``It’s not a separation of one and another. One is separating from four other brothers.’’
Bajaj Hindusthan shares soared on Monday when the Bajaj Auto acquisition became public. The sugar stock gained 6.11% to Rs 180.50 from its weekend close of Rs 170.10 per share, a gain of Rs 10.40. Bajaj Auto shares were more muted, gaining 0.82% to Rs 2,509.80 from Rs 2,489.30.
Bajaj Auto has a cash surplus of Rs 6,500 crore, and much of this money is invested in the financial markets.
“The ownership of Bajaj Hindusthan has always been with us,” Rahul told newspersons in what can also be construed as a warning to his nephew. “We are ready to sell Bajaj Hindustan shares at a pre-set price,’’ Rahul Bajaj said. What has happened is that the prices have shot up since the 2003 settlement. Kushagra takes pains to explain that during the interregnum, it was Bajaj Hindusthan’s stock that outperformed Bajaj Auto stock by a wide margin. This, Kushagra alludes, was never anticipated by his uncle Rahul. Kushagra now fears that his uncle’s intentions may be to put Sanjiv, his second son, at the helm of the sugar maker. Sanjiv ‘s elder brother Rajiv runs Bajaj Auto.
Rahul roundly dismisses this fears. “Had we wanted, we could have ousted Shishir anytime. But that’s not our intention.”
The 2003 family split plan envisaged Shishir Bajaj to sell his stake in the motorcycle maker in return for his brother and cousins exiting their shareholdings in companies, including Bajaj Hindusthan. The agreement was annulled last year by Rahul Bajaj and family members close to him, who later filed a suit in the Bombay high court claiming Rs 600 crore damages.
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