The six-year old Bajaj family dispute seems to be nearing a settlement, which will also untangle the complicated share holdings amongst among the various group companies headed by brothers and cousins in the Bajaj clan.

Though there have been several attempts to resolve the dispute including recommendations from the Company Law Board, the issues between the brothers remained bitter and unresolved.

However this time a firm settlement seems to have been reached, with the details havinf been filed with the National Stock Exchange.

Under the agrement, Rahul Bajaj has acquired 29.2 per cent in Bajaj Hindusthan from all family members. He will acquire the Bajaj Hindustan Limited stake from all group companies and will sell a 29.6-per cent in the sugar producer to Shishir Bajaj.

Accodingly, Shishir Bajaj will enlarge his stake in the sugar giant from 2.85 per cent to 32.47 per cent, for which he would pay reound Rs250- Rs260 crore.

The deal will be done for zero consideration and it could be adjusted when Shishir Bajaj sells his stake to Rahul Bajaj, as agreed.
 
Shares of Bajaj Hindustan, which had fallen due to a consolidated net loss of Rs197.62 crore in the financial year ended September 2008, opened on a high note this morning.

The company had a consolidated net loss of Rs4.01 crore last year, on a total income rose to Rs2,120.26 crore in FY'08, up from Rs1,812.86 crore in the last fiscal.

Besides, the board has declared a dividend of 60 per cent at the rate of 60 paise on shares of face value of Re one for 2007-08

A brief history of Bajaj family
Jamnalal Bajaj, the founder of the group and a close associate of Mahatma Gandhi, had two sons: Kamal Nayan and Ramkrishna.

The interests in the family holding companies were equally divided between the two.

Kamal Nayan's stake was equally divided between his two sons, Rahul and Shishir, while Ramkrishna's was trifurcated between his three sons: Shekhar, Madhur and Niraj.

Thus, Rahul and Shishir have a 25-per cent stake each of the family holding in the group's main investment vehicle, Bajaj Sevashram, while their three cousins own 16.67 per cent each.

Bajaj Sevashram holds the Bajaj family's interests in all group companies directly and through subsidiaries. It has a wholly-owned subsidiary, Jamnalal Sons, and a 78 per cent subsidiary, Bachhraj & Co.

The problem is that the equations will alter for the next generation as Rahul and Shishir have two sons each: Rajiv and Sanjiv, and Kushagra and Apoorv, respectively.

Each of them will get 12.5 per cent in Bajaj Sevashram.

On the other hand, Anant Shekhar's only son and Nirav Niraj's only son will inherit 16.67 per cent each.

This could have posed problems in the controlling group companies, though there is no immediate threat as Rahul, Sekhar, Madhur and Niraj are said to belong to one "camp" while Shishir is in the other.

Things may become complicated with the way the minority shareholders of Bachhraj & Co, one of the family's holding companies, choose to go.

In addition to the Bajaj family's holding, the Pittie family and B K Birla hold 22 per cent stake in Bachhraj.

B K Birla's grand-daughter Vasavadatta is married to Kushagra, Shishir Bajaj's son.

Who runs the show
Bajaj Auto is run by eldest cousin Rahul Bajaj and his sons, Rajiv and Sanjiv.

Sekhar looks after Bajaj Electricals, while Niraj runs Mukund with their partners, the Shah family.

Madhur plays various roles in Bajaj Auto.

The dispute came to the limelight when Shishir sought CLB intervention in 2003 for splitting the family assets.

On the CLB's advice, the family reached a settlement formula and signed a memorandum of understanding.

Under the formula, the Shishir group would get Bajaj Hindusthan and Bajaj Consumer Care and the Rahul camp would get the rest.

In addition, Shishir would get monetary compensation for foregoing his interest in the other group companies.

However, the formula has not been implemented so far, with both parties putting the responsibility for implementing it on each other.

The dispute is mainly stuck over the amount of cash compensation that Shishir would be paid.