In a dramatic move, lenders, led by the State Bank of India, on Tuesday pushed the board of directors of speciality steel producer Usha Martin to remove its non-executive chairman Prashant Jhawar from the post. The board has appointed G N Bajpai, a director of the company, as the non-executive chairman, in place of Jhawar.
“The board of directors of the company, in their meeting held on April 25 have appointed G N Bajpai as the non-executive chairman of the company and of the board of the company, in place of Prashant Jhawar, with immediate effect. In view of this Prashant Jhawar has ceased to be the non-executive chairman of the company and board of the company,” Usha Martin said in a stock exchange filing. Bajpai is a former chairman of capital market regulator Sebi.
The board meet was called on Tuesday following requests from the lenders, which were reportedly in favour of a change in the top management as they were not happy with the working of some of the promoters of the Kolkata-based company.
Prashant Jhawar, also a promoter of the company, alleged that he has been ‘improperly’ removed from the post of non-executive chairman of Usha Martin. “No cogent reasons or rationale have been provided for my removal,” Jhawar said in a press release issued after his removal. He did not attend the board meet.
“Also while, this proposal was put forth by the nominee director of the lenders, the motivations behind the board led by the management supporting this resolution are unclear,” he added.
Rajeev Jhawar, managing director and a promoter of the company, was unavailable for a comment.
Usha Martin is one of the largest wire rope manufacturers in the world and a leading speciality steel producer in India. The company’s wire rope manufacturing facilities located in India, UK, UAE, and Thailand.
The company had posted consolidated net loss of `413.61 crore in FY16. In December quarter of last fiscal its net loss stood at `109.20 crore. The company’s net debt equity ratio was 4.54 as on March 31, 2016. On consolidated basis, the net debt level and debt equity ratio were `4,022.38 crore and 2.94 respectively at the end of FY16.
On Tuesday, Usha Martin’s scrip fell 4.52% to end the day at `21.10 on the BSE.