Bayer India managing director Alan P McGilvray told The Financial Express that at the moment, there is no intent to reconstruct the board. "Presently there is no plan to add any member on the board of directors of Bayer India and decisions of this nature are taken only by the parent company, Bayer AG, in Germany." UTI's request is, therefore, on hold, he added.

McGilvray also added that Bayer's current chairman and chief of the RPG group, HV Goenka, had consented to continue to head the company's board. This is despite the divestment of the entire 7.4 per cent equity held by the RPG group in Bayer in a negotiated deal worth roughly Rs 20 crore last year. As on June 23, 1998, the Bayer India board comprised eight membersincluding Goenka, McGilvray, technical director J Walker and YH Malegam.

Bayer's stand comes even as the mutual fund has reportedly decided against pushing for a board representation at top notch corporates like Hindustan Lever and Bajaj Auto, following satisfactory presentations made to the UTI top brass, that shareholders' interests were well taken care of.

UTI's move comes even as Bayer and the Ahmedabad-based Zydus group firm, Cadila Healthcare, recently made a joint announcement "not to pool their pharmaceuticals interest in India in the form of a joint venture".

Bayer had, in July last, signed a memorandum of understanding (MoU) to set up a 51:49 joint venture healthcare company in India under which Bayer India was to transfer its existing pharma brands (13 formulations including Resochin and anti-fungal Canesten). The cumulative investment for setting up the new venture was roughly Rs 20 crore while the initial equity capital stood at Rs 16.2 crore. McGilvray said that Bayer India was now"developing growth strategies" for its pharmaceuticals business and would go it alone in the changed scenario.

An analyst with a leading Indian stock-broking firm, however, said that Bayer had lost "valuable time" and this may not be extremely healthy from the shareholders' point of view. In May 1998, Bayer had said that it was restructuring its pharmaceuticals business to "assure a non-loss situation" for its shareholders.

The exercise had, at that time, laid down plans to "discontinue all future investments in pharmaceutical sales and marketing". Bayer's domestic pharmaceuticals business accounted for roughly Rs 40-45 crore of Bayer India's turnover, though the trademarks for all brands are held by the German parent.

Meanwhile, senior Bayer officials also said that the group's film and photographic products (imaging technologies) business, Agfa, would be spun off into a separate company in line with the German multinational's global initiative to float DM 8.5 billion Agfa on the stock market. The Agfadivision now forms part of Bayer Industries Ltd, which is held 100 per cent by Bayer AG, Germany.