BAJAJ AUTO HEADS FOR SPLIT

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BAJAJ Auto could be headed for a division between Rahul Bajaj’s sons—Rajiv and Sanjiv—with the demerger plan being put on the fast track. The demerger will be used as a succession plan to carve out the business between the two brothers. Sources close to the development say the brothers do not share a great personal chemistry. A source close to Rahul Bajaj, however, told ET: "There is no fight between the two brothers. They are two different individuals. Sanjiv, as the executive director of the company, reports to the MD, Rajiv. The company does not have two centres of power. The demerger plan is not linked to them."

The proposal to demerge Bajaj Auto was first mooted a few years ago by the company’s management, ostensibly on the suggestion of FIIs that felt the company had excessive cash on its books. As per a loose plan, a part of the company’s cash and investment assets, including its shareholding in its insurance joint ventures with Allianz, were to be spun off and the option of these being merged with Bajaj Auto Finance had also been considered.

If and when the demerger goes through, Rajiv, 39, will continue to head the twowheeler giant while the financial services company will be run by Sanjiv, 37, an MBA in finance from Harvard. The proposal was, however, never taken to the board and has been on the backburner for some time now.

Sources close to the family say the demerger process has now been accelerated, and the frosty relations between the two brothers could be one reason for this. "The frostiness between the two brothers is not entirely a figment of people’s imagination," says a source. Right now, Bajaj Auto’s motorcycles business is handled by Rajiv while the Rs 6,000-crore portfolio management function has historically been handled by Rahul Bajaj. "So it does get awkward for Sanjiv as he ends up being the copilot in both, which doesn’t give him the same satisfaction as doing something on his own."

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