Promoters against MNCs in Asian Paints

Thursday, August 14 1997

Promoters against MNCs in Asian Paints

Dev Chatterjee

MUMBAI, Aug 13: Even as DSP Merrill Lynch is close to finalise the sale of Atul Choksey's stake in Asian Paints, the remaining promoters of the paint major have grouped up to prevent entry of any multinational or other hostile groups in the company through the back door. This follows reports that - ICI - one of world's largest paint company will buy the 9.5 per cent stake held by the Chokseys.

``We will not let any multinational whether it is ICI or any other company to take over the mangement of this company,'' said Ashwin Dani, Director of Asian Paints. ``Morever, along with the other two promoters familiies (the Vakils and the Choksis), we hold around 45 per cent stake in Asian Paints.

Financial institutions like UTI are holding another 25 per cent who will certainly back us,'' he added.

Moreover, dealers of the company - who hold around 15 per cent of the equity - are backing the present promoters. ``Equations can change if an outsider acquires the Choksey stake and make a public offer,'' said an analyst.

Asian Paints, India's largest paint company, was going through a major crisis with two FIIs who earlier agreed to purchase the Choksey stake backing out of the deal. ``We're close to finalise the deal. We'll officially announce it on Thursday,'' DSP chairman Hemendra Kothari said.

Dani said that the company's new management structure will be decided in the next board meeting and at present the promoters along with the management are busy making policy decisions, he said. It will take few more weeks to sort out all things, he added.

According to Dani, the information that ICI will buy 9.5 per cent stake presently stuck from DSP-Merril Lynch, is not true. ``But we cannot take the risk of letting any multinational to join our board,'' Dani added.

The company's shares are since going southwards as investors perceive the exit of Chokseys as disastrous. The Asian Paints scrip closed lower at Rs 311.75 on the Bombay Stock Exchange on Wednesday as against Rs 375 on August 1, the day when the deal was struck.