Both the warring factions have decided to abide by the order passed by the company law board to sell their stake to S K Manchanda, chairman of Prakash Roadlines, said B C Tiruvengadam, advocate for the winning bidder.
According to the CLB order, S K Manchanda would pay up over Rs 23 crore to other stake holders to gain absolute control of the company.
The feud in the two families over PRL started in 1990. The dominant group was led by S K Manchanda and Bharat Narang, and the other faction had Vijay Narang, R K Manchanda, S P Manchanda and others.
With the settlement arrived at before the CLB, all the pending cases will be withdrawn and S K Manchanda will fork out over Rs 23 crore to gain control of PRL, a source said. Following filing of consent affidavits by all the family members before the CLB, S K Manchanda has paid out almost 50 per cent of the bid amount.
The CLB had ordered joint evaluation of the company to decide on the bid amount, which was initially pegged at Rs 16 crore. But following objections by Vijay Narang-led family, the amount was revised to Rs 23 crore .
Prakash Roadlines had an equity base of Rs 20 lakh and during the pendency of dispute, S K Manchanda-Bharat Narang duo had increased the capital by adding Rs 20 lakh.
As per the CLB order, S K Manchanda would buy out 48 per cent of the original equity as well as 53 per cent of the Rs 20 lakh fresh equity from the other members of the family. Bharat Narang would hold on to his 8 per cent stake in PRL
The CLB has also directed the S K Manchanda-led PRL management to release dividends to the stakeholders of the disputed period up to March 1996, alongwith emoluments, if any, due to any member of the family on either side in their capacity as director or an officer of the company.
The settlement arrived at was only for the flagship PRL and other companies like Gem Lines, Caravan Goods Carriers, M Kannappa Automobiles and Prakash Coach Builders are still under dispute.
The ownership, evaluation of share price and bidding would take place at a later stage, a member of one of the families said.
He said, Even in these companies since they are inter-related to PRL, S K Manchanda may bid and buy out the rest of the family members. The company law board has seized of the issue of ownership of these companies and a settlement is expected anytime from now, he added.