The battle for control of the Hindi newspaper Amar Ujala, between majority shareholder Atul Maheshwari and minority partner Ajai Agarwal, has reached a crescendo with allegations that the Zee-Bhaskar combine has struck a secret deal with the minority promoter of the paper to take over management control.
In the light of this development, the Company Law Board (CLB) chairman S Subramaniam on February 17 directed that the payment of the second instalment of 5% by minority shareholders, to acquire Amar Ujala, be put on hold.The Maheshwari group, in an application to the CLB, on February 16, had accused the minority shareholder of violating the mutual terms of agreement of buy and sell option given to them.
A CLB order dated January 25, prohibits the petitioners from negotiating or selling to any third party for three years. However, Ajai Agarwal has since sought to buy out the majority shareholder.The Maheshwari group is said to have produced evidence suggesting the Zee-Bhaskar group would engineer a hostile takeover of Amar Ujala. What seems to have raised the hackles of the majority promoter was the first instalment of 5% amounting to Rs 12.7 crore paid by Ajai Agarwal on February 7. The payment is said to have come directly from the Zee group-owned Mediavest India.
Zee group has a print media venture with Dainik Bhaskar under the joint venture Diligent Media Corporation. Accordingly, as per the terms, the Maheshwari group has demanded that the minority promoters should be directed to sell their shareholding to the majority promoters.