Bajoria Arm Picks 13.3% In Kanoria Chemicals

Hooghly Holdings, a subsidiary of Arun Bajoria group flagship Hooghly Mills, has acquired 13.28 per cent stake in Kanoria Chemicals & Industries, following the Securities and Exchange Board of India (Sebi) ban on jute baron, his associates and his group companies from accessing the capital markets for one year.

Kanoria Chemicals & Industries vice-chairman & managing director R V Kanoria said Hooghly Holdings had informed the chemicals firm about its acquisition of 21,79,828 shares, representing 13.18 per cent of the company's equity capital of Rs 16.73 crore, on August 30. Kanoria Chemicals has passed on the information to stock exchanges today.

Arun Bajoria, when contacted, said Mega Stock, a group company which acquired the shares in Kanoria Chemicals over past few years, transferred them to Hooghly Holdings recently. Mega Stock did so because it figured among the Bajoria group companies which came under the Sebi ban.

Bajoria said his investment in Kanoria Chemicals was long term one and was not aimed at destabilising the management. "I want to scale up my holding in the company further. But the liquidity at the counter is very poor", he told Business Standard.

The Kanorias hold 60 per cent in the Rs 300-crore firm. Bajoria held 13 per cent while Life Insurance Corporation of India (LIC) held 15 per cent. The balance 10 per cent was widely held.

Sources in financial institutions said LIC might consider offloading its stake at a price of around Rs 90 a share while Bajoria said the scrip was a good buy at the ruling market price of Rs 30.

Even if Bajoria managed to purchase shares from LIC as well as public, his holding would not give him the opportunity of destabilizing the Kanoria management.

Kanoria said LIC was expected the approach the promoters first in case it decided to offload its holding. " Ours is a professionally managed company and in all fairness we would expect this from the institution with whom we have a cordial relationship," he said.

Alongside, Bajoria has decided to contest the Sebi decision which put ban on him and his associates for one year for his non-compliance of the Sebi (Substantial Acquisition) Takeover Code and attempted creation of evidence in the process of acquisition of nearly 14 per cent stake in the Nusli Wadia-controlled Bombay Dyeing last year.

He said he would shortly file a writ petition at Calcutta High Court challenging the ban. Bajoria is also fighting a case against the Bombay Dyeing management before the Company Law Board for oppression of minority shareholders' rights.