Man Industries promoters resolve feud by splitting businesses

Written by Press Trust of India | Updated: Sep 16 2013, 03:50am hrs
The feud between the Mansukhani brothers, promoters of the infra company Man Industries, today got resolved with the company board agreeing to divide the businesses between the siblings by spinning off the realty and construction verticals from the flagship company.

"Yes, the demerger has happened. The infra projects business (comprising the real estate and construction verticals) will be taken care of by my brother J C Mansukhani," Man Industries chairman Rameshchandra Mansukhani told PTI over phone.

"The family settlement entered into with J C Mansukhani has put an end to the disputes and misunderstandings," he said.

"As part of the agreement, the flagship saw pipes business will continue to remain under me," he said.

Jagdish C Mansukhani, the younger sibling, is a director of the company and reportedly owns 28 per cent in it while the elder R C Mansukhani is the chairman with a 35 per cent holding.

The Board of the company, which met today, has also approved the arrangement of the demerger.

"The Board observed that the pipe business and real estate construction/development business each have tremendous growth and profitability potential and therefore both the business activities require focused leadership and management attention," it said.

Man Infraprojects, to be headed by J C Mansukhani, will also be listed in due course and the board also approved a shares allocation formula, arrived at with help from consultancy form KPMG.

The Board agreed upon a 1:1 ratio of allocation under which a shareholder will get one share in Man Infraprojects for every share held in Man Industries, the company said in a statement.

"As per the Bombay High Court's orders, there will be same shareholders (for both the companies)," R C Mansukhani said.

The company statement said J C Mansukhani has resigned as director of Man Industries to focus on his newly-carved business, while R C Mansukhani and his son Nikhil have resigned from Man Infraprojects.

According to reports, both the brothers accused the other of impropriety. The dispute has already been with the Company Law Board since 2010 and also went to the Bombay High Court earlier this year, after J C Mansukhani decided to hold an extraordinary general meeting (EGM) of company allegedly to replace the chairman by inducting new board members.

The elder R C Mansukhani, who holds 35 per cent of the company, approached the Bombay High Court which restricted the company from conducting the EGM.

The company scrip had gained 7.73 per cent to close at Rs 68.95 a piece on the BSE on Friday, as against the 0.25 per cent dip in the benchmark. The company had posted a net profit of Rs 2.28 crore for the June quarter on a revenue of Rs 167.60 crore.