CLB's shot in the arm for Kushagra Bajaj

Board meetings of two holding companies stayed.

A day after publicly accusing his uncle Rahul Bajaj of trying to gain control of all the group companies, Kushagra Bajaj, CEO of Bajaj Hindusthan, had reason to smile.

The Company Law Board (CLB) today stayed the board meetings of investment companies Bajaj Sevashram and Jamnalal Sons, which hold all the assets of the Bajaj group, till the matter is disposed of.

The board meetings were convened to induct two representatives of the Rahul Bajaj faction in the five-member board of Bajaj Sevashram and one in the four-member Jamnalal Sons board.

The board composition of these two investment companies is important because the Bajaj family members had earlier agreed to split their group. But the split process has not been implemented yet.

Kushagra Bajaj, son of Shishir Bajaj, told Business Standard that they filed an application with the CLB on Friday, after Jamnalal Sons's Chairman Shekhar Bajaj sent a notice on Tuesday proposing the induction of Sanjiv Bajaj, Rahul Bajaj's son, and Niraj Bajaj, his cousin, as additional directors.

The Bajaj Sevashram company secretary also sent a similar notice on Wednesday proposing Sanjiv Bajaj as an additional director. A petition on the settlement of the Bajaj family assets has been pending with the CLB since March, 2003.

The principal bench of CLB today said the application will be heard with the petition on May 28 and 29 and asked the parties concerned to file their replies to the application by March 30 and rejoinder by April 15.

"The induction of new board members is being done to ensure that my father is outnumbered," said Kushagra.

"Although Rahul Tau holds 25 per cent in Bajaj Sevashram, neither he nor his family members are on the board of the two investment companies. So the nomination of his son on the boards of these companies is essentially to ensure that his interest is protected in case of a rift among them (Rahul, Shekhar, Madhur and Niraj) in the future," he added.

Rahul Bajaj and his brother Shishir Bajaj hold 25 per cent each in Bajaj Sevashram, the main investment company that directly and indirectly controls all Bajaj group companies. Their cousins, Shekhar, Madhur and Niraj, hold 16.67 per cent each.

Rahul Bajaj told the media in the morning on the sidelines of a CII meeting that there was no intention to oust Shishir Bajaj from Bajaj Hindusthan, as alleged by his nephew Kushagra.

He said the equity structure in Bajaj Hindusthan and Bajaj Consumer Care was such that "we hold controlling stakes there and we could have thrown out Shishir Bajaj if we had so desired, but that is not our intention."

An earlier agreement among the family members proposed splitting the group into two.

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FAMILY FEUD

2002: Discussions began on splitting the Bajaj group

March 2003: Shishir Bajaj group files petition with CLB which asks the family to resolve the issue, orders status quo

June 2003: S Gurumurthy and D S Mehta chalk out the split formula; memorandum signed

Sept 2006: Rahul Bajaj's lawyers claim that an oral pact reached that deviated from the original agreement; Shishir Bajaj denies it

March 6, 2007: Jamnalal Bajaj Sons proposes induction of Sanjiv Bajaj as an additional director; calls board meeting on March 14

March 7, 2007: Shekhar Bajaj, chairman of Bajaj Sevashram, proposes induction of Sanjiv and Niraj Bajaj as additional directors; calls board meeting on March 13

March 12, 2007: CLB stays board meetings