Arbitrator named in Maha Scooters row

Bajaj Auto, which already holds a 24 per cent stake in MSL, also wants to acquire the 27 per cent stake the government holds in MSL.

Confirming the appointment of the arbitrator, a senior government official said, "We had put forward four names (of retired Supreme Court and High Court judges). From this, Bajaj Auto chose Sawant."

Despite protracted negotiations, the government and Bajaj Auto could not agree on the value of the state's stake in MSL.

The official said, "Bajaj Auto's original offer was Rs 50 a share for the state's stake in MSL. We outrightly rejected this. Thereafter, Crisil was appointed to conduct an independent valuation of the state's stake. Crisil valued the state's holding at Rs 204 a share. But Bajaj Auto did not agree with this. They offered a maximum of Rs 75 a share."

The government then set up a nine-member committee headed by chief secretary Ajit Nimbalkar to resolve the dispute. The committee also failed in its mission.

The government resolution on MSL divestment says, "The Western Maharashtra Development Corporation (WMDC), a 100 per cent state government enterprise, had invested Rs 27 lakh as equity capital in MSL in 1977. For that last several years, Bajaj Auto has been following up with the state government seeking the divestment of its stake in MSL."

"As per the agreement reached between the WMDC and Bajaj Auto, the latter has to be given the first right to purchase the government stake whenever a move is made to divest the same after duly assessing the market value of the shares of MSL. If a consensus is not reachable between WMDC and Bajaj Auto, the issue may be referred for arbitration," the government resolution says.

A Gordian knot

Retired chief justice of the Kerala High Court Arvind Sawant appointed arbitrator.

Bajaj Auto, which already holds a 24 per cent stake in MSL, also wants to acquire the 27 per cent stake the government holds in MSL.

Arbitrator appointed after protracted discussions and a nine-member panel failed to resolve the dispute.

Crisil values government holding in MSL at Rs 204 a share.