Denying industry speculation that Gharda Chemicals and Godrej…


August 12, 2007

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Denying industry speculation that Gharda Chemicals and Godrej Industries may go for an out-of-court settlement brokered by leaders in the Parsi community, sources close to the agrochemicals major said the company is hoping for a solution from the Bombay High Court, where the dispute currently rests.

Though founder Keki Gharda refused to comment, “The matter is sub-judice, I can’t talk,” he said. Sources told ET that the dispute continues and the veteran scientist “is in no mood to entertain Adi Godrej’s claim of holding 6% stake in the company.”

Mr Godrej, head of Godrej Industries, is said to have shown interest in making a strategic investment in the Rs 700-crore company, especially after Mr Gharda announced his succession plans. Mr Godrej had reportedly bought the stake from one of Dr Gharda’s relatives a few years ago.

Mr Godrej refused to comment. Known for its R&D strength, Gharda Chemicals has always been wooed by foreign and Indian suitors. According to industry estimates, the company could be worth three-four times its turnover or about Rs 2,400 crore.

But Mr Gharda, without a successor, hasn’t warmed up to Mr Godrej’s offer and has gone ahead with his succession plans. Last month, he appointed Sunil Nayak, formerly with L&T and Hindustan Unilever, as CEO. This is the first time Gharda Chemicals has a CEO.

“Plans are on to hire professionals and constitute a board of directors. This should be done in another three months. Mr Gharda, who turns 78 next month, is looking for a long-term solution so that the company continues to function after him,” said a source.

Mr Gharda and his wife hold 60% in the company. Relatives and some employees hold 33%. Any significant management change will need the support of 75% of shareholders, something Mr Gharda has been unable to garner.

“Mr Gharda is more of a scientist and does not like to be involved in squabbles. In fact, he is taking help from close aides to follow the case in the high court,” said the source.

Original article here