The race for the control of Xerox Modicorp has begun, with the joint venture partners -- Xerox Corporation of the United States and Bhupendra Kumar Modi -- drawing up plans to buy out each other.
"We want to make it a Xerox company," a Xerox spokesperson said. "We have different ambitions for the company. We can take better care of its assets and people," Modi, who is the chairman of Modicorp, told Business Standard.
While Xerox, the $17 billion Fortune 500 company based in Stamford, Connecticut, holds 70 per cent in Xerox Modicorp, Modi owns 24 per cent, and the balance is held by the public.
Modi owns the shares through two companies, SpiceCorp and Modi Rubber, a company he jointly controls with his brother Vinay Kumar Modi.
According to Modi, the shareholders' agreement of Xerox Modicorp lays down steps for carrying out a valuation of the company in case the partners agree to separate.
The joint venture partners have referred the matter to the Delhi high court for its interpretation.
"Once the valuation has been completed, either of the two partners can buy out the other. We are also ready to buy," Modi said, adding that he was not keen on retaining the Xerox brand if he were to buy Xerox Corporation out of the joint venture.
If he succeeds, this will not be the first time that Modi has bought out a joint venture partner.
Modi, who had brought a string of multinational corporations to India through joint ventures, has in the past bought out companies like JBC, International Paper and Telstra from joint ventures. However, in his joint venture with Alcatel, Modi had sold his stake to the overseas partner.
Xerox Modicorp started in India in 1983 as Modi Xerox. Modi was its founder chairman and president.
The company was rocked by a controversy some time ago when Xerox Corporation informed the US Securities and Exchange Commission that its Indian subsidiary had made improper payments to government customers to push sales, up to 2000.
In 2000, such payments stood at $600,000-700,000. According to the Xerox spokesperson, investigations into the matter are going on.