SEBI yet to decide breach of takeover code by Bajoria

By Our Special Correspondent

MUMBAI, OCT. 16. The operations of Mr. Arun Kumar Bajoria, owner of many jute mills in Calcutta, to accumulate shares of Bombay Dyeing are opening a new chapter in Indian corporate history and the end result is keenly awaited in the corporate world.

It is expected to set a precedent in the area of corporate mergers and acquisitions (M&As) in the country.

Mr. Bajoria claims to have picked up a 14 per cent share in Bombay Dyeing and he is also demanding a seat on the board of the company.

With friends and relatives he is reported to hold more than 15 per cent of the equity of the company, which is the threshold limit for an open offer.

Mr. Nusli Wadia, Chairman of Bombay Dyeing, is doing everything in his control to stop this corporate raider.

Now the matter is with the Securities and Exchange Board of India (SEBI). The regulator has to take a decision whether Mr. Bajoria has violated the disclosure norms of its Takeover Code.

Mr. Wadia is holding more than 41 per cent stake in Bombay Dyeing. He directly holds 36 per cent of the company's equity.

The board holds three per cent voting rights to the company's global depository receipts (GDRs) and two per cent is held by Ratan Tata companies. The financial institutions hold 15.78 per cent.

Recently Bombay Dyeing took many initiatives for restructuring the company by appointing consultants such as Andersen Consulting. The company has complained to SEBI that Mr. Bajoria violated the takeover norms. Mr. Wadia has won an order from the Company Law Board freezing the voting rights of Mr. Bajoria.

Now Mr. Bajoria has to prove to SEBI that he had informed the regulator soon after he picked up five per cent shares of Bombay Dyeing earlier this year.

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