Asian Paints. Ici In Talks

ICI Plc is discussing the future of its 9.1 per cent stake in Asian Paints (India) Ltd amid continuing confusion over whether it can retain the shares, an ICI-India executive said.

The British chemical company bought the stake in Indias largest paint maker last August, sparking debate over whether the investment required other shareholders approval. Leading shareholders strongly opposed ICIs arrival.

People are discussing. I think we should let them get on and find a solution which is mutually (acceptable), Ashok S Ganguly, chairman of ICI India Ltd, told Reuters in an interview yesterday.

He refused to give details of the discussions or specify ICIs options. He said he did not have any time-frame to resolve the issue.

 

ICI has applied to the government to approve the stake, but Asian Paints officials said last week no decision had been taken. The government might block the investment if Asian Paint shareholders continues to oppose it.

Ganguly said ICI bought the stake from former Asian Paints managing director Atul Choksey with the sole purpose of pre-empting competition.

The fact is, these shares were in the market. We were keen to get it before our competitors got it. We have got it and we have prevented our competitors from coming in. That was our sole purpose and that would continue to be our purpose, said Ganguly.

Other leading shareholders objected to the purchase, fearing it was the first step in a hostile takeover.

Ganguly responded: The whole point is very, very simple to deny advantage to our competitors by fair means. Thats what business is all about.

People have misunderstood and called it a hostile takeover... We are very clear that what we did, we did transparently, openly and under the law to protect our business interests.