Amar Ujala to place shares in escrow

Maheswaris fear minority promoter Ajay Aggarwal may place 35% stake to third party for raising capital.

Amar Ujala group promoter Atul Maheshwari has approached the Company Law Board for placing 100 per cent of the publication's shareholding in an escrow account.

The Maheshwaris have expressed concern that minority promoter Ajay Aggarwal could pledge his 35 per cent stake to a third party to partly fund Rs 250 crore needed to buy out the 65 per cent holding from the Maheshwaris.

The application was filed on February 8, a day after Ajay Aggarwal deposited Rs 12 crore (5 per cent of the consideration) as the first tranche to take control of Amar Ujala.

The next installment of Rs 12 crore is due on February 22. After that, 30 per cent payment has to be made every three months.

The counsel for the Maheshwaris have argued in their petition that "this condition has innocuously not formed a part of the order dated January 25".

The counsel pointed out that in the oral hearing, it was agreed that besides the consideration, the entire stake in the publication would be placed in an escrow account to be released on final payment.

The Company Law Board has ordered the publication to not to start any new edition or close any edition till the full payment spread over nine months is made.

The board has directed that there should be no change in senior management and board of directors, no sale or purchase of assets or any additional capital commitments and fresh borrowings till the final payment.

The Maheshwaris have been directed to submit the current financial position of A&M Publications and Amar Ujala Publication, including details of fund commitments.

The board has asked Ajay Aggarwal to maintain the status quo regarding the shareholding. The matter would come up for hearing later this month.

Business and management dispute at the publication came to a head last March. While Aggarwal had alleged that his powers had been severely curtailed in the garb of corporate restructuring, the Maheshwaris contended that they wanted to run the publication in a professional manner to face competition.

CLB has directed the petitioners to refrain from facilitating, negotiating or shopping around for partners for three years from 25 January this year.