Apollo Tyres has the option of either going in for the recently-announced buyback guidelines or choose reduction of capital under Section 100 of the Companies Act for the disputed shares.

The price and quantum of shares will be the same, whatever be the method decided by the company, sources said. The price will be between Rs 52 and 58 per share -- calculated on the basis of the SEBI guidelines.

The Apollo board has to decide whether to go in for an open offer (under the buy-back route) or to only go in for a selective purchase of the disputed shares for reduction of capital under Section 100.

The board's decision will then be vetted by the financial institutions and subsequently by the shareholders.

The Special Court looking into the securities scam cases gives Apollo Tyres theoption of buying back the 46 lakh disputed shares -- which translates into 15 per cent of the equity held by Harshad Mehta.

If the company decides to adopt the buy-back route, it may announce an open offer for all the share-holders. The approval would be taken at an extra-ordinary general meeting (EGM) or an annual general meeting (AGM) for this particular resolution. The shareholders approval will be taken during the period from May to September.

It is pointed out that the company has taken shareholders' approval in the AGM held last year to buy-back its shares. A company can buy back its shares up to 25 per cent of its paid-up capital. Thus, it has the option of buying back up to an additional 10 per cent of the equity capital (balance the 15 per cent being bought back from Harshad Mehta).

Under the second route of reduction of capital under Section 100 of the Companies Act, available to the company, it would seek the approval of the high court which would take three to four months.

The board'sdecision will depend on the company's absolute tangible gain for adopting a particular route. Sources said that the company was keen to sort out the problem being faced by the investors of fake/duplicate shares floating in the market for the last six to seven years. The company is also planning to go in for dematerialisation of shares, which would not have been possible if these disputes shares existed.

It saves on a lot of secretarial and unnecessary paperwork which the company had to carry out.