Asian Paints fracas to hit Apcotex too

MUMBAI, Aug 16: The Asian Paints controversy is all set to spill over to its associate company - Apcotex Lattices Ltd - in which the Chokse...

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MUMBAI, Aug 16: The Asian Paints controversy is all set to spill over to its associate company – Apcotex Lattices Ltd – in which the Choksey family owns a majority stake. The three remaining promoters – the Danis, the Vakils and the Choksis – have threatened to sell off 10 per cent minority equity to business rivals if the Chokseys go ahead with the sale of their 9.5 per cent stake in Asian Paints to multinational companies like ICI.

The breakway promoter of Asian Paints, Atul Choksey said he will be concentrating on Apcotex Lattices after his severence from Asian paints. “I will be actively involved with Apcotex Lattices, in which my family owns a majority control,” he told The Indian Express. Choksey will be taking over as the Chairman of Apcotex Lattice following the death of his father and former chairman of both Asian Paints and Apcotex – Champaklal Choksey.

As relations among the promoters have reached a new low sources close to Asian Paints’ promoters said: “If Chokseys sell their stake in Asian Paints to our business rivals, we can do the same with our equity in Apcotex Lattice.” The Board of Directors in Apcotex Lattices consist of Atul Choksey’s nominees barring two directors who represent the other promoters.

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Though Apcotex is not a large company, it has the potential to convert itself into a full-fledged paint company. In fact, sources say, Chokseys would be investing in this company to make his foray into the paint business.

For the year ended March 96, the sales of Apcotex Lattice was Rs 36.65 crore while net profit stood at Rs 4.5 crore. The company manufactures various kinds of synthetic rubber and lattice products and supplies raw materials to its parent company. Apcotex has its manufacturing plant at Taloja, near Mumbai.

Apcotex Lattice came out with a Rs 23 crore public issue in August 1996 to part-finance its expansion of its capacity to 10,000 mt.

Due to this complex cross holdings in the equity of other companies, all the four partners are meeting on August 19 in Mumbai to chalk out a strategy.

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Insider say Atul Choksey will offer to buy out the shares of other promoters in Apcotex and adjust it with his own equity in Asian Paints.

A large number of top level officials from Asian paints are also expected to join Atul Choksey in the new company, sources say.

The board meeting scheduled for August 22 will decide the fate of all the players in Asian Paints drama.