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Debt-ridden Usha Martin's Rajeev Jhawar open to family settlement

Firm has been embroiled in a family war that broke out about a few of years ago, and peaked when Prashant Jhawar was removed as non-executive chairman

Ishita Ayan Dutt & Dev Chatterjee  |  Kolkata/Mumbai 

Usha Martin
Logo of Usha Martin. (Photo courtesy: Usha Martin)

In the first signs of rapprochement amid a pitched battle for the control of Usha Martin, Rajeev Jhawar, one of the promoters, has said he is open to a settlement. The two promoter factions — and his son Rajeev Jhawar, currently the managing director, on the one side, and chairman emeritus Basant Kumar Jhawar and his son on the other side — have an equal share of 25.5 per cent each in Usha Martin, the most prized entity in the group. A family settlement will, however, include other companies, too, like Education & Solutions, Usha Breco, UshaComm, and Usha Martin, one of the largest wire rope manufacturers in the country, which has an annual turnover of about Rs 36 billion, has been at the receiving end of the family war that broke out a couple of years back. It peaked when was removed as the non-executive chairman last April after the board passed a resolution to the effect. Subsequently, filed a petition in the and also moved the (NCLT) against his ouster. On August 18, the issued an order directing the promoter and promoter entities to maintain the status quo on shareholding. A hearing in the is scheduled for Wednesday. The lenders had an earlier agreement with the promoters to infuse an equity of Rs 900 million — Rs 450 million by and Rs 450 million by But with the order in place, this was not possible.

The infusion of equity has been a bone of contention between the lenders and The faction claims that the commitment of bringing in equity was made by Rajeev Jhawar, and says it did not agree to bring in more equity as it was not sure whether the funds would be used to revive the company. Rajeev Jhawar, however, said, “I am always open for a settlement, but there would have to be willingness on the other side as well. If a settlement happens, it would include all the " In Usha Breco, has a majority; in Prabhat Khabar, has a majority; and in Usha Martin, the two sides have equal stakes. He also said he would fight to get the order vacated. In a communication dated December 15, 2017, to the Prime Minister's Office and the finance ministry, accused of fund diversion and having foreign bank accounts. The founder sought a detailed investigation against The letter also alleged that the company's financial performance declined due to deliberate mismanagement and rampant diversion of funds and manipulation of its share price. countered the allegations, saying that was the chairman of till 2010 and till April 2017. “Why are these issues being raised now? They were very much part of the board decisions,” he said. He also said his father was a non-resident Indian for the past 20 years and they were compliant with all regulations, especially on foreign accounts. is in the process of finding buyers for its wire ropes division. It has got offers from three international But in the past few weeks, the sale process has gotten a little slow. Family feud Allegations by Basant Jhawar

  • set up spurious in different countries for siphoning off funds
  • Company’s performance declined due to deliberate mismanagement and rampant diversion of funds
  • Projects at the cost of Rs 26 bn were commissioned in 2014 but the company showed no increase in output; gross Ebitda declined
Rajeev Jhawar’s response
  • Compliant with all regulations
  • was the chairman till 2010 and his son Prashant till April 2017, then why are they raising issues now
  • They were party to all board decisions
  • In a span of 11-12 years, firm’s topline grew from Rs 7-8 bn to Rs 36 bn; issues like coal block cancellation, downturn in steel market and expansion project going onstream responsible for performance

First Published: Tue, January 30 2018. 21:39 IST
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