Bajaj split talks back to square one

Rahul Bajaj and his estranged brother Shishir have failed to reach an agreement on splitting the family business.

Lawyers appearing for the Bajaj brothers earlier this week informed the Company Law Board, where the issue is being heard, that negotiations between them were "back to square one".

Rahul and Shishir have filed counter applications with Ashok Desai, the senior counsel for Rahul, seeking termination of a separation plan proposed by chartered accountant DS Mehta. Shishir Bajaj, on the other hand, wanted the agreement proposed by Mehta to be honoured.

Refusing to intervene at this juncture, Company Law Board Chairman N Balasubramian wanted the two sides to sort out their differences across the table.

"If you really want a settlement, make a sincere effort... let us try (it)... Point out the modalities and try this by give and take," the chairman said. "We have seen bifurcation (split) of very big groups happen so smoothly... What is the problem with you? ... You are delaying (the process)," he observed.

Desai assured the board that they would try again after Diwali.

DS Mehta is believed to have suggested the formation of a mirror company to hold shares of the Bajaj family in different firms. These are then to be split between the two brothers, giving them direct control of separate companies.

In August, the Company Law Board had asked both parties to try to implement the settlement package and report back to it. At that time, the counsel for both sides had informed the board that the agreement regarding the split in the group was ready and differences on the share transfers would be sorted out soon.

Differences in the Bajaj family came to light after Shishir Bajaj sought to take full control of the companies managed by him, Bajaj Hindustan and Bajaj Sevashram. In return, he proposed to part with his stake in Bajaj Auto and other group companies.

Holdings in the Bajaj family are equally divided among Rahul Bajaj, Shishir Bajaj, Shekhar Bajaj, Madhur Bajaj and Niraj Bajaj and the scions hold approximately 30-40 per cent in each group company.

The Bajaj family has been plagued by infighting, since Shishir asked the other family members to buy him out as he wanted an exit from Bajaj Auto to consolidate his position in Bajaj Healthcare and Bajaj Hindustan Ltd.

The Company Law Board has posted the matter for the second week of November for further hearing.