Rahul Bajaj takes battle for "Bajaj" name to Supreme Court
18 May, 2005
Rahul Bajaj can't stomach Firodias' audacity to drop 'Bajaj' from the company's name
BY OUR BUSINESS CORESPONDENT
Bajaj Auto Ltd has moved the Supreme Court challenging the decision to change the name of Bajaj Tempo Ltd to Force Motors Ltd. Baja Auto holds a 24% stake in Force Motors (formerly Bajaj Tempo Ltd), whereas the Firodias hold a 10% stake.
Bajaj Auto makes two-wheelers and three-wheelers in the country, whereas Force Motors (till recently Bajaj Tempo) makes bigger people and cargo movers.
DaimlerChrysler is the original owner of the Tempo brandname. Daimler Chrysler had signed a technical collaboration with Bajaj Tempo in 2003, to provide technology for common rail diesel engine. Bajaj Tempo is still an important supplier to DaimlerChrysler India, for the requirements of Mercedes engines in India.
Daimler exited Bajaj Tempo in 2001 by selling its shareholding to Firodias, but had allowed easy transition on the name change front. Later, Daimler requested that "Tempo" be dropped since it was a registered trademark, to which Firodias complied - at the cost of displeasing Rahul Bajaj.
Ever since the Bajaj Tempo board decided to change name, Bajaj Auto, particularly its chairman Rahul Bajaj has been complaining about the move to drop "Bajaj" from the company's name. The matter went to the Registrar of Companies (Maharashra) and the Bombay High Court, both of whom have cleared the new name. Bajaj Auto has now filed a special leave petition before the SUupreme Court, challlenging the name change.
After the High Court and the RoC had cleared the name change, the new name (Force Motors) had taken effect. Rahul Bajaj hopes to reverse the name change before the Supreme Court. The court will take up the case only in July.
Rahul Bajaj says his intention is to make it public that a name change proposal should be treated as a special resolution under Section 22 of the Companies Act, 1956.
Under the Companies Act, while an ordinary resolution needs 51 per cent of the shareholders' approval, a special resolution needs the approval of 75 per cent of shareholders. Without the consent of the Bajaj group, the Firodias could not have pushed the special resolution. The contested name-changed was effected through an ordinary resolution.
Earlier, Rahul Bajaj had gone on record saying that that he wouldn't go the Supreme Court "just for the heck of it". He had said Bajaj Auto will appeal the decision "only if it made sense." Apparently, it makes sense for him now.
In New Delhi, Rahul Bajaj also said that he is willing to sell the Bajaj stake in Force Motors if an appropriate offer is made.
It remains a mystery to Bajaj Auto investors as to what benefit will accrue to the company with the dogged pursuit of Force Motors. Rahul Bajaj has not explained to his investors so far on how litigation on Force Motors will help Bajaj Auto's stock and future.
Rahul Bajaj himself is having problems over the family ownership of the Bajaj empire, with the Bajaj brothers ranged over opposite sides of the table. Hopes that the differences would be settled soon have not borne fruit so far.
BY OUR BUSINESS CORESPONDENT