Sources close to Kothari family, however, said Deepak Kothari paid between Rs 500 and Rs 600 per share to his brother. The company's paid-up capital is Rs 5 crore.

Vikram Kothari gets control of Rotomac Industries, which manufacturers pens, stationery and greeting cards, as part of the business restructuring in the family.

Kothari Products managing director Deepak Kothari confirmed the acquisition but refused to divulge the price at which the deal was struck. The share is quoting around Rs 155 on the Bombay Stock Exchange.

Vikram Kothari, who was vice-chairman of the company, his wife Sadhna Kothari and his nominee Deepak Aggarwal, have resigned from the board of Kothari Products.

Sources said that MM Kothari, father of the two brothers,will continue as chairman of Kothari Products. Besides the Pan Parag brand pan masala, the company also manufactures coconut oil.

Deepak Kothari told The Financial Express that the business reorganisation had been done amicably. It was a mutually agreed settlement, he said.

With Vikram Kothari's exit, the equity holding of Deepak Kothari and MM Kothari will go up to 75 per cent. Of the balance, public holds 15 per cent while mutual funds and other companies hold over 9 per cent.

The Kanpur-based Kothari Products, the largest producer of pan masala in the country, clocked a turnover of around Rs 260 crore with a profit after tax of Rs 25.08 crore in the year ended September 1998. The company had declared a dividend of 100 per cent during the year.

The company recorded a turnover of Rs 146 crore and a profit after tax of Rs 11.07 crore during the six months ended March 1999. The profit in the first half of the current fiscal was over 15 per cent lower than the net profit of Rs 13.08 crorerecorded during the first half of the previous year. Profit after interest but before depreciation and taxation also dropped to Rs 17.24 crore from Rs 19.56 crore in the first half.

Industry observers attribute the fall in the net profit to increase in competition from other brands such as Rajnigandha and Manikchand and a drop in other income to Rs 1.64 crore during the first half of current year from Rs 3.31 crore in the first half of previous year.