INDIA: Jute Baron’s Designs On Bombay Dyeing Put On Hold

Jute baron and real estate speculator, Arun Bajoria, has been buying shares of Bombay Dyeing and Manufacturing, one of the few profit making textile mills in India, and a paper company, BILt.A spanner has been thrown in the works by the Department of Company Affairs (DCA), and possibly by the Securities and Exchange Board (SEBI). DCA, a government department that oversees compliance with the Indian Companies Act, has suspended the voting rights of the purchased shares. Bajoria has fallen foul of a provision of the law that says an acquirer has to notify the company whose shares are being purchased as soon as shareholding reaches 5 per cent of the share capital. Bajoria currently owns 14 per cent. Bajoria claims that a letter informing the company had been sent, but it has not been received. SEBI is also investigating whether Bajoria informed Bombay Dyeing when his holding passed five per cent.There is speculation that Bajoria could be acting on the Ambani family's behalf. The Ambanis, the most aggressive and currently number one business group in India, is a known Bombay Dyeing foe. In addition to competition in textiles, where both companies own famous brands, they both make the raw materials for the manufacture of polyester. Bajoria denies these rumours however.Bombay Dyeing last year had a turnover of $210m and pretax profits of $11m. Its market capitalisation is $94m. The company also owns real estate valued at $44m, which makes it especially attractive to Bajoria, a known real estate speculator.