Following the differences between members of the board of directors of Kasturi & Sons Ltd, which owns and publishes The Hindu
newspaper, the company’s chairman, N Ram
, has written to the six dissenting board members
, urging them to avoid a confrontational course. They should help create a harmonious and collegial atmosphere and participate actively in the management of the company, to which each of them had much to contribute, he added.
Earlier, six members of the owner family, also board members, had objected to the change of guard announced on Monday, when it was decided N Ram would take over as chairman of Kasturi & Sons Ltd, while N Murali would be co-chairman. N Ravi would be editor-in-chief of The Hindu and Malini Parthasarathy would be editor.
In the letter, which addressed various issues raised by the six board members, Ram said, “Your reservations on the conduct of the meeting are misplaced and inaccurate and the resolutions passed at the said meeting are consistent with the company’s charter and interests.”
No new issue was being raised and all its elements had been discussed repeatedly among the directors at previous board meetings, as well as outside, the letter said. These were discussed at a board meeting on August 20, in which all directors had taken note of several shortcomings in the performance of the newspaper, which was facing a tough and competitive environment across the country, it added.
“That meeting formed the precursor to various subsequent discussions held with the erstwhile editor and the erstwhile CEO (chief executive officer) on the state of the company’s affairs,” Ram said. The active participation of the opposing members in the four-hour-long meeting, without any objection, clearly showed the meeting was perfectly in order, he added.
Through the last two years, the management of the company’s editorial and business functions had been engaging the board’s attention and the issue before it was the role of the 12 whole-time board directors, he said. The “hands off management” approach had denied the company the benefit of the rich experience and talent on the board and turned all the supposedly whole-time directors into idle, ornamental bystanders, who were left with no work other than attending board meetings once in two-three months Ram added.
The discussion on Siddharth Varadarajan’s performance as editor of The Hindu was discussed at the August 20 meeting, and no director had any word of praise for, or defence of, his performance, the letter said, adding Varadarajan was informed of this by the chairman. Similarly, though he was given a fair and full opportunity to respond, Arun Anant “chose not to respond to any of the specific points and, instead, made a general speech on how much he respected the company and “loved the shareholders”, the letter said.
Defending his decision to use the chairman’s casting vote, Ram said, “The question on the casting vote issue raised by K Venugopal before the meeting was irrelevant for the purpose of commencing the meeting, which started with the election of the chairman, as this was obviously premature and a case of putting the cart before the horse.”
With the six directors opposing the resolution to retain the structure and the motion consequently failing in the absence of sufficient majority, the erstwhile management structure had become untenable and the company could not continue to repose trust and confidence in then editor and then CEO. “Of necessity, and solely with a view to preventing the newspaper’s activities from coming to a grinding halt, the managerial supervision of the business and editorial affairs of the company had perforce to be reorganised,” Ram said.
“It was at this stage that I, in my capacity as chairman, out of necessity and in the interest of the company, exercised my casting vote to approve the resolution. Failing this, not only would an unacceptable crisis have arisen in leadership, but the very citadel of the newspaper, built over more than a century, would have been grievously threatened. Such a situation would certainly have been exploited by the company’s competitors to the obvious disadvantage of the newspaper’s loyal readers. Consequently, the management of the company had to be directly overseen by designated directors who undoubtedly have tremendous experience and credentials in this regard,” he added.
The meeting of the board held on October 2, even taking into account the dissent, “was conducted in a fair and lawful manner, strictly in accordance with the practice, custom, and convention set by our illustrious company, after eliciting the views of all Directors”, Ram said.
The letter sent by the directors opposed to the developments hadn’t taken into consideration the articles of the company, which were statutorily required to prescribe regulations for the conduct and management of the company’s affairs, he said.
“Needless to state, despite this very cordial approach I am taking to bring each one of us together, if you still embark on any unwarranted precipitate action, we will spare no effort to repel the same,” he added.