The Hindu Business Line : Pawar steps in to resolve Bajaj Hind-Balrampur row

Not so sweet
The issue under dispute is part of a no-holds-barred `cane war' involving the two companies
At the heart of the dispute is the interpretation of a Press Note issued on August 31, 1998

MR SHARAD PAWAR

New Delhi , Sept. 24

Having played mediator in the Bajaj family feud, the Union Agriculture Minister, Mr Sharad Pawar, is now engaged in ironing out differences between the country's top two sugar majors, Bajaj Hindusthan Ltd (BHL) and Balrampur Chini Mills Ltd.

On Wednesday, Mr Pawar convened a meeting between BHL's Chief Executive, Mr Kushagra Bajaj, and the Managing Director of Balrampur Chini, Mr Vivek Saraogi. Also present were the Secretary, Department of Food and Consumer Affairs, Mr T. Nanda Kumar, and the Joint Secretary (Sugar), Dr C.I. Joy.

The issue under dispute is part of a no-holds-barred `cane war' involving the two companies, which, in the course of setting up new mills, have been poaching into each other's turf. "The Minister is keen there be no unhealthy competition for cane. The idea behind the meeting was to hear the versions given by both parties and work out some compromise," sources told Business Line.

At the heart of the latest dispute is the interpretation of a Press Note issued on August 31, 1998 by the Industry Ministry, fixing a minimum radial distance of 15 km between two sugar mills. One interpretation is that this norm applies to only an existing factory and a new mill to be established.

Balrampur Chini is currently constructing two mills at Kumbhi and Rudrapur-Gularia, both in Lakhimpur Kheri district. The former is 18.8 km away from BHL's existing plant at Gola, while the latter is 22 km from its Palia Kalan facility and 24 km from Gola. That makes them conform to the minimum distance norm concerning an existing and new plant.

BHL's case, however, is that the new units are coming up within 15 km of locations where its affiliate, Ojas Industries Private Ltd, had filed Industrial Entrepreneurs' Memorandums (IEMs) for setting up mills much before Balrampur Chini. As per its interpretation, the scope of the 1998 Press Note covered not only existing-versus-new factories, but also cases of IEM-to-IEM or proposed-to-proposed mills. The dispute over interpretation of the Press Note has since been referred to the Supreme Court, which is to hear the matter on November 14. In the meantime, the Centre is slated to file an affidavit stating its own position on the issue. And that may, in turn, hinge on Mr Pawar's efforts to negotiate a deal acceptable to both sides.

A similar conflict surrounds Rana Sugars proposed mill at Moradabad, which is allegedly within 15 km of a site for which Triveni Engineering & Industries had earlier filed an IEM.

The apex court, in its interim order on September 5, had restrained Balrampur Chini from undertaking any crushing activity at Kumbhi and Rudrapur-Gularia, while permitting the company to go ahead with construction at its own risk without claiming any equity.

More Stories on : Corporate Disputes | Sugar | Other States

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Gujarat coast parries cyclone Mukda

Pawar steps in to resolve Bajaj Hind-Balrampur row

From worker to board director

NTPC eyes direct sales to bulk users

`Why can't Indian ships have foreign crew?'

Gold looks vulnerable; copper, aluminium firm up

Mid/small-cap stocks may take centre stage

RBI fiat to banks opens biz window for vendors

NHAI to embark on huge data collection exercise