Essel Group's Subhash Chandra handing over reins to kin

Strengthens role of family members through board-level changes at Essel Group in the last fortnight

Don't want to miss the best from Business Standard?

In what appears to be a gradual strengthening of the role of family members in the $3-billion Essel Group, it has been announced Amit Goenka, the son of Chairman Subhash Chandra, has been appointed chief executive officer (CEO) of the international broadcasting business of Zee Entertainment. Chandra's younger brother, Jawahar Goel, has been elevated from the post of managing director of Dish TV to that of chairman.

Currently, Amit is CEO of online gaming company Pan India Network.

The moves come at a time when Chandra is undertaking a board-level reorganisation of the entertainment-to-education major. In the past fortnight, key executives of three listed firms - Zee Media Corporation, Zee Entertainment Enterprises and Dish TV - have stepped down, paving the way for family members to take charge.

While Zee Media's executive director and CEO Ashish Kirpal Pandit stepped down on October 12, Subodh Kumar, executive vice-chairman, Zee Entertainment, resigned on October 14. R C Venkateish, CEO of Dish TV, stepped down from the post, effective Saturday. Now, Venkateish is an advisor to Dish TV, while Kumar is a non-executive director at Zee Entertainment.

Analysts tracking the group view the board-level reorganisation as a move towards succession planning by Chandra. A detailed mail sent to Essel Group elicited no response till the time of going to print.

The trend has been visible for a while, with Chandra, 64, stepping down from the boards of companies managed by his brothers to ensure they take complete charge. For instance, in December 2014, Chandra, his immediate family members and the entities controlled by them were no longer part of the promoter group of Essel Propack, the group's packaging arm, as part of a modified family arrangement.

A BSE notification dated December 29, 2014, said Chandra, his immediate family members and the entities controlled by them together held 3.54 per cent of the company's share capital, which would no longer be part of the promoter group. Chandra would be considered non-promoter, non-executive director, the notification said, though he would continue as chairman of the board. Analysts term this a largely figurehead role, in the absence of any stake in the company.

FAMILY PLANNING
In the past fortnight, key executives of Essel Group’s three listed firms — Zee Media Corporation, Zee Entertainment Enterprises and Dish TV — have stepped down, paving the way for family members to take charge

BROTHERS

Laxmi Narain Goel
chairman, Suncity Projects: Manages real estate, film exhibition, oil distribution
Jawahar Goel
chairman, Dish TV: Manages cable distribution and direct-to-home business
Ashok Goel
vice-chairman & MD, Essel Propack: Looks after packaging and amusement parks SONS
Punit Goenka
MD & CEO, Zee Entertainment Enterprises
Amit Goenka
CEO, Pan India Network, now appointed CEO of Zee Entertainment’s international broadcasting business
In the case of Dish TV, Chandra has stepped down as non-executive promoter director, effective October 27, giving complete charge to Jawahar.

A third brother, Laxmi Narain Goel, is said to be managing Essel Group's real estate, film exhibition and gas distribution businesses independently. In 2010, Laxmi, 62, had stepped down as managing director of Zee News Ltd, now Zee Media. The move was intended to help Chandra's son Punit Goenka take charge of the post. While Punit is now managing director and CEO of Zee Entertainment, he continues to oversee operations at Zee Media.

"While many family-run businesses have not taken up succession planning seriously, some are beginning to do so. There are many ways in which this can be done - the trust route, the holding company route or a family agreement. But the intent has to be there," said Kavil Ramachandran, executive director, Thomas Schmidheiny Centre for Family Enterprise, Indian School of Business.