'Nusli Wadia should not be scared that I am trying to take over Bombay Dyeing'

Arun Bajoria, whose controversial acquisition of Bombay Dyeing shares has sent shock waves through the Indian corporate world, has finally broken his silence.

It was only recently that Nusli Wadia woke up to reality that Arun Bajoria, the Calcutta-based jute baron, had acquired shares of Bombay Dyeing exceeding 14 per cent over the last six months. This apparently sent the Wadias into a tizzy. India Inc was also rife with rumours that Reliance Industries' Ambanis were behind the whole affair.

While the Wadias have asked the market regulator -- Securities and Exchange Board of India -- to freeze Bajoria's shares alleging that the latter had violated Regulation 7 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 1997, the jute baron remains unruffled.

Under the SEBI regulations, Bajoria was to intimate both the Wadias and the SEBI soon after his holding in Bombay Dyeing exceeded 5 per cent. Though, the Bombay Dyeing bigwigs have been accusing Bajoria of not adhering to such norms, Bajoria says he has not indulged in any wrong-doing.

Bajoria also debunked the rumours that his intention was to take-over Bombay Dyeing. Ever since the controversy surfaced, Bajoria has been avoiding media. Earlier efforts to contact him were futile. However, after much persuasion, Bajoria finally agreed to speak to rediff.com's Rifat Jawaid.

In a frank discussion, Bajoria defends his case and denies he has any links with the Ambanis. Excerpts:

You have built up a cash mountain from the jute industry, which has been in a despondent state and seldom had any good prospects in India. Where does the secret of your unprecedented success lie?

I firmly believe in a man's destiny. Of course, mere Fate doesn't help you achieve everything. You need to be sincere and put in hard work to achieve desirable results. I owe all my growth to the jute industry even though the general perception about this sector has not been encouraging.

Not many people know that I had worked as an executive at the Hooghly Jute Mills from 1965 to 1985, before I took charge of the company. There my father's able guidance helped me in acquiring the rudiments of business. As soon as I assumed charge of Hooghly Jute Mills, I took a bold decision and went ahead to buy six closed jute mills.

I bought Gondalpara Jute Mills from G D Kothari, Waverly Jute Mills from the Bajorias of McLeodgunge, Bewaria from the Bangurs, Jagdal Jute Mills from the Goenkas, Hukumchand Jute Mills from G P Birla, Fort William Jute Mills from the Bangurs again, and India Jute Mills from Surajmal Nagamal.

Most businessmen would have hesitated before taking such a step, since jute as an industry was on the verge of extinction. Recently, too, over a six-month period, I have established three twine factories in Andhra Pradesh. They will all be converted into jute mills soon.

A quality that your friends admire in you is your ability to purchase things at increasingly lower rates?

Investment in stocks has been a hobby of sorts with me. I wouldn't call it a favourite pastime, since a transaction where a lot of your hard-earned money is at risk can never be a pastime.

Having said that, I admit that my investments have paid me rich dividends so far. I always go by my own analysis before going for any stocks. I study the fundamentals of the company and wait till the bottoming out period of the market. It's all a demand-and-supply equation that apparently works in the end. I always purchase shares in bulk rather than investing in diversifying portfolios.

When and why did you choose to acquire Bombay Dyeing shares? And when was it that you noticed that you were actually in possession of 14 per cent of the company's shares?

I started investing in Bombay Dyeing since March-April this year. I found the fundamentals of the company quite attractive from a long-term perspective, even though its scrip was not doing very well on the stock markets. Also the company's assets, especially real estate, offered good prospects. The only worrying factor then was the company's poor performance. Since its shares were available cheaply and readily, I chose to take advantage of the situation.

Business grapevine has it that your move was a conscious decision in collaboration with the Ambanis. Even Bombay Dyeing's Nusli Wadia has termed your action 'unlawful'. How do you react to such allegations?

This is not quite a matter of ethics. The question is whether I have violated any laws. The law says that as soon as your holdings exceed 5 per cent, you must intimate the company. Not only did I inform the Wadias, I also apprised the SEBI and the Calcutta Stock Exchange of my holding. The letters I sent to them are a proof of this fact. Am I to be held responsible if the Wadias have not received the letter?

As for the accusation that I am an Ambani stooge, let me tell you that I have never even met the man. The question of me being hand in glove with the Ambanis against Nusli Wadia is nothing more than a fairy tale.

Also, I want to make one thing absolutely clear. Nusli Wadia should not be scared that Arun Bajoria is trying to take over Bombay Dyeing or is planning to make a public offer. I purchase shares in much the same manner as most investors do: I keep profits in mind.

I make profits by buying shares at lower prices and selling them at higher rates. And it is within my rights to ensure that the company doesn't try to indulge in foul play against me.

What do you think is the future of the jute industry, and what do you think are the general business prospects in West Bengal under a Marxist rule?

Theoretically, jute has no prospects in West Bengal. But such depressing talk about jute has been doing the rounds since the past three decades or so. Yet, I have managed to make good money from this industry. Such talk will continue. It all depends on your business skills and how you turn things to your advantage.

Coming to your question in relation with Bengal's business future, I believe the politicians from all parties have now begun to realise that they just cannot afford to neglect industrialists in the state. The industrial scenario in the state has become grim in the last 15-20 years, especially due to poor work culture.

However, if the current trends are anything to go by, I am optimistic that Bengal would surely emerge as a frontrunner in industrial sector.

SEE ALSO:

Arun Bajoria: The mysterious jute baron with uncanny business acumen

Reliance rules out buying Bombay Dyeing shares

Bajoria's temporary 'no' for open public offer in Bombay Dyeing

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