The hearing remained incomplete and will continue on either September 19 or 24, to be confirmed later.

Paul had opposed the sale of the CPD -- which consists of Calchem and Detergents India Ltd -- alleging that the deal with Henkel Spic India had violated the Securities & Exchange Board of India's takeover code. Paul, who has two nominees on the Calchem board, holds a 26 per cent stake with his associates.

Henkel had bought Shaw Wallace's 55.57 per cent stake in Calchem and controlling interest in Detergents India Ltd for Rs 51.05 crore, after the liquor major decided to sell the CPD and repay creditors to avoid winding up. Henkel has already deposited Rs 5 crore in an escrow account in line with the directions of the Calcutta high court.

Paul had pointed outthat Henkel paid Rs 17.73 crore for distribution rights to Calchem's products, while it had paid only Rs 11.80 crore for Shaw Wallace's stake of 4,43,1245 equity shares at Rs 266.50 per share. Henkel had paid Rs 2 lakh for the nine per cent 14,497 cumulative first preference shares of Rs 10 each and seven per cent 15,681 cumulative second preference shares of Rs 10 each.

Paul had alleged that this was done to restrict the share price, since under the Sebi takeover code, it is mandatory to make an open offer to the minority shareholders also if the acquirer buys out over 10 per cent in any company. He alleged that by splitting the sale price, the company will be offering a lower price to the minority shareholders.

However, Shaw Wallace's counsel SN Mookerjee and Calchem's counsel PC Sen told the CLB bench (east) of member CR Das and CLB vice-chairman S Balasubramanium today that Paul had withheld vital information.

They said Paul has moved the Sebi with a similar grievance, and that he had also purchasedthe bid papers.

Calchem's Sen argued that Paul had been opposing the sale with the aim of extracting a higher price of around Rs 750 per share and to throw a spanner in Shaw Wallace's repayment process. Sen told the CLB bench that Paul is also a shareholder of Shaw Wallace and he should be well aware of the importance of the CPD's sale in Shaw Wallace's survival strategy.

Mookerjee pointed out that Paul had not objected to the memorandum of understanding entered into by Henkel and SWC in March 1996 when the sale price was fixed at Rs 42 crore and Rs 205 per share was being offered. He felt that, since the price offered now is around Rs 265 per share. Paul should have no objection.

Mookerjee also said that the bid had listed the number of assets for sale, and Paul neither objected then nor the valuation done by the independent audit firm.