For the first time, Khaitans won’t be represented on firm’s board since they acquired Union Carbide India in 1993 and renamed it Eveready Industries India. But they will continue to hold 4.84% stake
Brij Mohan Khaitan family members stepped down from the board of the country’s largest dry cell battery maker, Eveready Industries India, on Thursday, following an open offer and expression of interest from the Burman family to take control of the company.
This would be the first time that the Khaitans would not have representation on the board of the company since its acquisition. Eveready came under the Khaitan fold in 1993 when it acquired Union Carbide India (renamed Eveready Industries India). The Khaitans, however, continue to hold 4.84 per cent in the company.
Eveready informed stock exchanges on Thursday that Aditya Khaitan and Amritanshu Khaitan tendered their resignations from the board as non-executive director and chairman and as managing director, respectively, with effect from March 3, 2022.
The board met today to take on record the announcement from the Burman Group – that holds about 19.84 per cent in the company – to public shareholders of Eveready and its intent to take control of the company. The board also accepted the resignations from the Khaitans with “deep regret”.
In his resignation letter to the board, Amritanshu Khaitan, said, “As the largest shareholders of the company, the Burman Family have expressed their interest to take management control of your company and give new leadership and direction to the company, it would be appropriate for me to step down from the board.”
“I have and continue to believe in the intrinsic value of Brand Eveready and the vast distribution network your company enjoys. I will continue to be a long-term stakeholder in the company and participate in the future growth plans of the company,” he said in the letter.
Khaitan also said that he was stepping down from the board on a strong footing, with the company having achieved its highest ever operating profits last year, despite the challenges posed by Covid-19.
“Going forward, I hope the new leadership will deliver greater success in terms of higher top line and bottom line growth for your company and create significant value for all stakeholders of the company,” he mentioned in the letter.
The move comes after Burman Group entities announced an open offer for a 26 per cent in Eveready on Monday.
Amritanshu Khaitan joined the Eveready board in 2011 and assumed the role of managing director in 2014, taking on from his father, Deepak Khaitan, elder son of Brij Mohan Khaitan. Aditya Khaitan, younger son, became non-executive chairman of Eveready after Brij Mohan Khaitan died in 2019.
In the notice to the stock exchanges today, Eveready informed that Suvomoy Saha, joint managing director, would assume the responsibility of managing director, till such time it is taken on record by the board on the recommendation of the Nomination & Remuneration Committee, at its meetings to be convened shortly.
This is not the first time that Eveready would have a managing director from outside of the family. For the first four years, after the acquisition, C P Raman was the managing director till Brij Mohan Khaitan’s elder son, Deepak Khaitan, took charge.
However, even when Raman was the managing director, Brij Mohan Khaitan was the chairman and Deepak Khaitan was on the board of the company. But with the Khaitans’ resignations today, it’s the first time that the family would not have a representation on the board – which probably is a fallout of their reduced holding in the company.
Khaitans’ holding in the company dropped as financiers invoked pledged shares (the shares were pledged to borrow funds for group firm, McNally Bharat Engineering). As of December 2021, the Khaitan family’s holding stood at 4.84 per cent, down from 27.39 per cent in December 2019.
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