Bajaj moves DCA over Tempo renaming

Tempo renaming issue

today that his lawyers had written to the regional director (Mumbai) of the Department of Company Affairs (DCA) today seeking an intervention in Bajaj Tempo name change issue.

Bajaj Auto and Bajaj Tempo are locked in a disagreement over whether Bajaj Tempo's proposal to change its name to Force Motors requires a special resolution as in Section 21 of the Companies Act, 1956 or can be passed through an ordinary resolution as per Section 22 of the Act.

But Abhay Firodia, chairman and managing director of Bajaj Tempo, who is at the centre of the Bajaj Auto-Bajaj Tempo issue, today said that Bajaj Tempo would go ahead with the name change and place an ordinary resolution before the shareholders at an extraordinary general meeting on April 5, 2005 to authorise the board of the company to effect the name change.

"Section 22 is a fairly new addition to the Companies Act, 1956 and my contention is that the name change can be effected only through a special resolution as per Section 21 of the Act," said Bajaj.

Bajaj, who along with his family and Bajaj Auto, holds a 24 per cent stake in Bajaj Tempo, may block the move to change the name of Bajaj Tempo, if the resolution seeking shareholders' approval to change the name is treated as a special resolution. The Firodias can manage without the consent of the Bajaj group if it is considered an ordinary resolution.

A special resolution needs the support of at least 75 per cent of the shareholders present and voting at the general shareholders meeting while an ordinary resolution needs only 51 per cent of shareholders' approval.

Bajaj Tempo has sought to change its name to Force Motors as its former collaborator DaimlerChrysler of Germany wanted the word Tempo dropped from the company's name. Tempo is a brand name owned by DaimlerChrysler, an automobile major. Firodia said that as far as he was concerned there was no dispute between the two companies.

"We have been ordered by the government to change the name of the company through a ordinary resolution under Section 22 of the Companies Act, 1956. We have issued notices to all our shareholders and the stock exchanges about the EGM we are having next month," said Firodia.

Firodia also said that Bajaj Auto had not served Bajaj Tempo any notice nor had there been any correspondence between the two companies on this matter.

For name's sake

ROAD BLOCKS

Rahul Bajaj may block the move to change the name of Bajaj Tempo, if the resolution seeking shareholders' approval to change the name is treated as a special resolution.

COUNTER POINT

Abhay Firodia, Bajaj Tempo CMD, said his company would go ahead with the name change and place an ordinary resolution before the shareholders at an EGM on April 5, 2005