After signing the agreement documents on Tuesday night, the Shishir and Rahul Bajaj factions submitted the consent terms of the settlement to the Company Law Board on Wednesday and withdrew the petition.
The dispute between the brothers came to the limelight first in 2003 when Shishir Bajaj sought the CLB's intervention. CLB has been continuously advising both the factions on reaching the settlement. A spokesperson of Bajaj Hindusthan confirmed signing of the settlement documents on Tuesday night.
"Only task left now is to submit the consent terms of the settlement to CLB, which we are doing today," said a person who mediated the six-year-long settlement deal. He did not wish to be quoted.
The current bear market also helped resolve the dispute. The low valuation of Bajaj Hindusthan helped Rajiv Bajaj buy out the company's shares at a market price before transferring it to his brother. "High stock prices were a deterrent," said the mediator.
Rahul Bajaj bought about 4.1 crore shares of Bajaj Hindusthan at market price on Tuesday before transferring it to Shishir Bajaj. In return, he got Shishir Bajaj's 25 per cent stake in the family's primary holding company Bajaj Sevashram.
Bajaj Sevashram in turn holds hundred per cent shares of another investment firm Jamnalal Sons that in turn holds a 78 per cent stake in the holding firm Bachhraj & Co. All the three investment firms have stakes in various Bajaj Group companies such as Bajaj Auto [Get Quote], Bajaj Electricals [Get Quote] and Mukund. It is this complicated structure, especially the compensation for the minority shareholder Bachhraj & Co that made the settlement take such a long time.
Madhav N Pittie of the Pittie family that holds a 12.5 per cent stake in Bachhraj, moved Mumbai High Court on Monday for the loss that the investment firm would incur for selling Bajaj Hindusthan shares at Tuesday's market price.
The matter is sub judice and it remains to be seen what kind of compensation Rahul Bajaj would have to fork out for the minority shareholder's claims.
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