December 26, 2008, may go down as a red letter day in the history of corporate India, when Mangalam Srinivasan, one of the long serving members on the board of directors of Satyam Computer Services Ltd (Satyam) decided to call it quits from the software firm after its founder-chairman Ramalinga Raju hit the key-note before playing his now (in)famous billion dollar number about the company. Since then till January 9, at least 23 companies have lost their top honchos including managing directors, executive directors, independent directors, chairman of the audit committee and company secretaries. This may be, perhaps, the first time that India Inc has experienced such a massive exodus of key officials from their rank and file in a time span as short as two weeks.
The list collated by FE from different sources has intentionally omitted the name of those directors and top officials who left their respective companies already or tendered their resignations, following management shake-outs, scheme of arrangements, or retirement. The list also excluded the names of those directors who resigned before the truth about Satyam hit the headlines.
Analysts see the spate of resignations from the board of directors of the companies since the sordid story about Satyam hit the headlines as too much of a coincidence. ?It is indeed an interesting development, and never before, in my knowledge, such a spate of resignation by directors had happened. However, prima facie there is no reason to believe that these companies are doing something undesirable.
The Satyam incident may be an isolated one and it should not be generalised,? said an analyst with a local brokerage house on conditions of anonymity. While some of those who had quit their posts had given personal reasons for their resignation, some had not mentioned any reason for their exit. ?It is difficult to say that all had been smitten by the Satyam bug. There could be different reasons behind their resignations,? he added.
On January 8, RC Sinha, chairman and non-executive managing director of Maytas Infra Ltd forwarded its resignation to the company?s board. He cited, according to sources, no specific reason for his resignation. Incidentally, Maytas Infra and its wholly-owned subsidiary were the two infrastructure firms that Satyam proposed to acquire for a consideration of over $1.3 billion.
APJ Abdul Kalam, KV Kamath, Tarun Das and Kiran Karnik, the high profile directors of Andhra Pradesh based-EMRI have also put down their papers.
On January 7, GR Sundaravadivel, director of Lotus Eye Care and the chairman of the audit committee submitted his resignation from the company on personal grounds. On the same day, the Hyderabad-based Coromandel Fertilisers informed stock exchanges that S Viswanathan, one of the independent directors of the company had submitted his resignation. Viswanathan also resigned from the director board of EID Parry, one of the group companies of Coromandel Fertilisers.
On January 5, Cambridge Technology Enterprises said that HK Katti, one of the directors, resigned from his post effective January 5 and the company said in its regulatory filing that it would fill the vacancy arising out of the resignation of Katti within the stipulated period.
Similarly, Omaxe Ltd lost its executive director Vipin Aggarawal on January 3 while Nelcast informed bourses on January 2 that J Joseph, its managing director had resigned. Sanghi Polyester, a company belonging to the Sanghi group in which a full blown family fued is on for management control, notified regulators on January 8 that Reena Gupta, one of the directors of the company resigned from her post effective January 1. Similarly, Dayashanker Pandey decided to call it a day at SAL Steel Ltd effective January 1, while Kamal K Guota resigned from the post of vice-president and secretary of the company on the New Year eve.
Other companies which lost top management talent include Empee Distilleries Ltd (RS Nagra), ABB Ltd (Ravi Uppal), Empee Sugars (RS Nagra), Ramco Industries (SA Bhima Raja), Shri Clochem Ltd (Suersh Patel), Suashish Dimond (Pawankumar Bagla), Modella Woolnes (KC Narang), Vintage Cards (Rajesh Vaishnav), Astra Zeneca (Graham Baker), Atul Ltd (LL Shah), Indage Vinters (WillKomm, Le Saux and Antoine Merlaut), Parsvnath Developers (Vijay B Raheja), and HCL Infosystems (Narsimhan Jagadeesh).
According to industry watchers, what started as a trickle is now turning out into a torrent and may be in the days to come more key officials including independent directors may chose to end their innings in their respective companies if the current trend is anything to go by. The list of resignations may grow longer and longer, they say.