The Rs 3,500-crore Jindal Drilling and Industries, part of the DP Jindal group, abruptly announced dismissal of its managing director, Naresh Kumar, today. Hours later, the latter said he’d sue the promoters for this “shocking” decision.
The company, without citing any reasons, sent this strongly worded statement to the Bombay Stock Exchange: “In view of the board having lost confidence in him, (it) has withdrawn forthwith, all powers and authorities granted to him or being exercised by him in such capacity.”
Nobody in the company was willing to talk on the reasons. Kumar told Business Standard late in the evening that his removal was illegal. “I have full faith in the country’s judicial system and know I will get justice,” he said, without wishing to give any details.
The markets, however, seem to have given a thumbs-up to the decision, with the stock closing at Rs 573.15, up 4.3 per cent on the BSE. Jindal Drilling & Industries has five jackup rigs on long-term contract with Oil and Natural Gas Corporation. The DP Jindal Group also owns Maharashtra Seamless and Jindal Pipes.
Though there have been reports of tension between the promoters and the MD in several companies, instances of a public announcement of an MD’s dismissal are rare.
In 2001, the Tatas had dismissed Dilip Pendse as managing director of Tata Finance after a lot of accusations and counter-accusations.