The legal tussle revolves around Stefan Pierer not being upfront with another board member about KTM Bajaj’s increased ownership.
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The legal tussle revolves around Stefan Pierer not being upfront with another board member about KTM Bajaj’s increased ownership.
While KTM needs to secure €600 million (i.e. approximately ₹5,732 crore) by the end of May, its board members are now suing each other for not being upfront. The dispute centres around Stefan Pierer and Stephan Zöchling, both of whom are board members of Pierer AG and KTM AG alike.
The German publication, Der Standard, reports that Zöchling, who also happens to be the president of Dabepo Holding AG (a component manufacturer) had provided an €80 million (i.e. approximately around ₹764 crore) loan to Pierer Gruppegesellschaft mbH (Piko). The latter sits at the top of the Pierer corporate structure and is owned by Stefan Pierer.
But, Zöchling is now demanding immediate repayment of this loan, which was originally scheduled to mature at the end of June 2025. His legal team argues that Pierer AG breached their contract by failing to disclose essential information, particularly regarding pre-emption rights and Bajaj’s involvement in KTM which saw the Indian company increase its ownership share. The loan from Zöchling was reportedly arranged in the fall of 2024 when the group was already experiencing financial difficulties, with Pierer AG allegedly promising shares in exchange for the financial assistance.
However, Pierer AG has firmly rejected these claims and is counter-suing Zöchling. A company spokesperson told Der Standard that Pierer Gruppegesellschaft mbH does not have any loan due and that Zöchling's actions are nothing but "exploitation attempts."
This internal power struggle comes during a critical period for KTM. Stefan Pierer recently stepped down as CEO of both Pierer AG and KTM AG amid the company's financial restructuring, though he remains on the boards of both entities. Meanwhile, Zöchling serves as CEO of aftermarket parts company Remus while also holding board positions at Pierer AG and KTM AG. The corporate structure further adds complexity to the situation, with Pierer AG owning KTM AG, which in turn is partially owned by KTM Bajaj AG.
Meanwhile in India, Bajaj Auto’s MD and CEO, Rajiv Bajaj assured in an interview that it will not let KTM succumb to this financial situation. KTM has been quite profitable for Bajaj in terms of revenue returns. While he did agree that the current situation (the financial part) is quite “difficult”, his team is actively working on coming up with sustainable solutions for the long run. To know what exactly Rajiv Bajaj said and what his plans are, head to this link here.
Source: RideApart
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