Citing gross violation of the Sebi takeover code and disclosure norms, Ballarpur wants the chambers and market regulator itself - the Securities and Exchange Board of India - to clarify the grey areas in the takeover code and the larger issue of corporate governance and the Companies Act.

“There are a lot of grey areas in disclosure norms such as when a market operator starts buying equity in a company and it reaches five per cent or above”, Ballarpur Industries Ltd (BILT) managing director Gautam Thapar told The Financial Express.

Every promoter would be interested in these issues to be sorted out, especially the ones who do not have deep pockets to shore up their holding or companies which have low market capitalisation.

He said the market regulator should clearly define who the people “acting in concert” are in the case of an acquisition.

Responding to a query that in case Mr Bajoria offers the promoters these shares, Mr Thapar said he would examine the issue on its merits. Asked about the financial institutions’ role, he said that though he has not got in touch with them, the Unit Trust of India (UTI) would be ‘concerned’.

BILT has an equity capital of Rs 72 crore after the merger of AP Rayons and Ballarpur Industries. The promoters hold 31 per cent in the company, while the FIs’ holding is around 32 per cent. Thapars’ business associates from Saudi Arabia, Al Murjan, hold 16 per cent of the equity stake.

The floating stock of the company is around 14 per cent, of which Mr Bajoria reportedly has bought nine to 10per cent.

"Our records show that he owns over three per cent in the company and theshares have been bought under the name Megacorp or Megaresources", he added.

But there may be shares acquired by other companies or his friends andrelatives, which may add up to a greater figure.

BILT had received communication from Mr Bajoria in April claiming that hehad picked up around 10 per cent stake in the company and he wanted a seaton the board. After April, however, Mr Bajoria has not communicated with thecompany on the issue. Though industry watchers term the move as a threat,Thapars are not exactly worried as they hold a substantial stake in thecompany. The Thapars feel that Mr Bajoria may be wanting to make a quickbuck. BILT has already informed SEBI the existing share-holding pattern ofthe company.