Bajoria demands Wadia's removal from Bombay Dyeing

Bajoria demands Wadia's removal from Bombay Dyeing
PTI & EEB

KOLKATA/MUMBAI, FEB 19: After a brief lull, the new `takeover tycoon' Arun Bajoria is back in action and is set to demand Bombay Dyeing Chairman's Nusli Wadia's removal from the board of the company at the Company Law Board (CLB) hearing on March 12. Bajoria has charged Wadia with gross "financial mismanagement" which has resulted in falling shareholder's value.

"Yes, I have received an intimation from CLB for a hearing on March 12 and there I will demand Wadia's removal from the board of the company," he said here today, according to a PTI report.

Bajoria said, "I had filed a case with the CLB under Sections 396 and 397 for mismanagement in Bombay Dyeing by Nusli Wadia and will demand his removal from the board."

Bajoria said he would also demand appointment of an external auditor to probe instances of `mismanagement' by Nusli Wadia in the company. "I will also demand my induction on the board of the company," Bajoria said.

Apart from `these three main demands', he had also said many more `irregularities' were committed by Nusli Wadia, but declined to elaborate.Asked whether he still held over 14 per cent of Bombay Dyeing shares, the jute baron said, "I do not exactly remember my holding right now as I was not keeping well for the past few days."

To a query whether he had sold any percentage of shares during the past few days, he said he was not aware of it. "I am not looking after my stock details for the pastcouple of days but my lawyer will be aware of it," he said.

Bajoria claimed to have acquired over 14 per cent stake in Bombay Dyeing in November last following which the company had moved the CLB and got voting rights of the entire Bajoria's holding frozen. The Calcutta-based jute baron has also charged Wadia with asset stripping of the company.

Bombay Dyeing had alleged that Bajoria did not inform under Sebi's acquisition regulations when he had crossed the mandatory 5 per cent limit stake and had sought action against the jute baron. The company's case with the CLB was filed under Section 111.

Bajoria, on the other hand, had claimed that he had duly informed the Calcutta Stock Exchange (CSE) as well as the company as soon as he had crossed the 5 per cent limit through letters under certificate of posting.

Though Bajoria's claims are nothing new, corporate watchers say Bajoria has now run out of steam and wants to negotiate with Wadia to sell back his stake. A Mumbai-based merchant banker was even roped in by Wadia to broker the deal but nothing came out of it.

On the other hand, the Securities Exchange Board of India (Sebi), as usual, is sitting on the Bajoria file and failed to come out with a decision even after 5 months. The legendary delay on Sebi's part has led to Bombay Dyeing shareholders as well as its promoters confused. ``We fail to understand why Sebi takes so much time in coming out with its verdict. Whether it's Videocon-Sterlite-BPL price rigging case or even vanishing companies, it's always sleeping,'' said a corporate source.

"The hearing of Bajoria case has been fixed for February 20," a senior SEBI official said.

In fact, the Sebi had made changes in its own takeover code after Bajoria's used the loopholes to buy 15 per cent equity in the company. ``If Sebi's regulations were clear and not nebulous, mergers and takeovers would have been much easier,'' said a Mumbai-based corporate head. ``Historically, it has failed to give justice in time,'' he added citing the example of delay on the Sebi's part on Sterlite's bid for Indal which resulted in Canadian firm Alcan taking control over the company only to sell it later to Hindalco at a premium. ``Shareholders value is last on Sebi's mind... why can't they be more efficient,'' he added.