Maharashtra Scooters Ltd (MSL) has become a subsidiary of Bajaj Holdings & Investment Ltd (BHIL) with effect from June 17, 2019, the company said in a release on Tuesday. This comes after WMDC Ltd, a Government of Maharashtra undertaking, transferred its 27 per cent stake in Maharashtra Scooters Ltd to BHIL.
MSL was incorporated as a joint-sector company promoted by Bajaj Auto Ltd and WMDC and manufactured geared scooters.
With a gradual shift in consumer preference from geared scooters to motorcycles, the company discontinued production of geared scooters in 2006. The company’s activity is currently restricted to the manufacture of pressure die-casting dies, jigs and fixtures, primarily meant for the two- and three-wheeler industry.
Having achieved the broad objectives of the joint-sector project, WMDC had, in 2003, offered to sell its 27 per cent shareholding in MSL, and BHIL had confirmed its willingness to purchase these shares.
Since WMDC and Bajaj Auto Ltd could not agree on a price, the price at which the shares were to be sold had been jointly referred to a sole arbitrator, Justice Arvind V Savant (Retd).
The Award of the Arbitrator dated January 14, 2006 valued the share price of MSL at ₹151.63 per share as the rate at which 3,085,712 equity shares of MSL held by WMDC were to be sold to the company. The said award was challenged by WMDC in the Bombay High Court, the statement said.
The Division Bench of the Bombay High Court pronounced its judgment in the matter on May 8, 2015.
A Special Leave Petition (SLP) was then filed by WMDC in the Supreme Court against the above order.
After hearing both the parties, the Supreme Court passed an order dated January 9, 2019, dismissing the SLP filed by WMDC and directed that: “BHIL shall pay to WMDC an amount of ₹232 per share in place of ₹151.63, along with interest at 18 per cent per annum from the date of the award (14 January 2006). No sooner the afore-said payments due are made, the shares shall be transferred to BHIL.”
BHIL made the necessary payment to WMDC by way of cheques on January 14, the statement said.
WMDC has transferred its 27 per cent stake in MSL to the company on June 17.
“Consequent upon the acquisition of 27 per cent stake of MSL from WMDC, the company (BHIL) holds 51 per cent shareholding in MSL. MSL has hence become a subsidiary of BHIL with effect from 17 June 2019,” the statement said.