GMR's Rao starts with a Rs 1,500-crore pledge

In a rare act of philanthropy, GMR Group Chairman G Mallikarjuna Rao has pledged his entire share in the group for charity.

Rao had committed $340 million (Rs 1,540 crore) for the GMR Varalakshmi Foundation (GMRVF) to serve the under-served sections of the society, said GMR.

Interestingly, this has coincided with the arrival of Berkshire Hathaway’s Warren Buffet in Bangalore. Buffett — among the world’s greatest philanthropists — is in India to convince the wealthy to donate liberally for charity.

Rao and various members of his family own 100 per cent in GMR Holdings, which holds close to 71 per cent in GMR Infrastructure. GMR Infrastructure has a top line of Rs 5,000 crore.

“Since my initial years in business, I have believed that we have a responsibility to give back to the society in which we thrive and to which we owe our success,” Rao said on the sidelines of the signing of documents pertaining to a family constitution that was agreed upon in 2007.

“According to the arrangement, G M Rao has pledged his entire 12.5 per cent stake towards the foundation. So, he will not take any benefit from the company for holding these shares, except for his position as an executive. The endowment will be released in tranches as and when required for various activities,” said a top company official.

In December last year, Wipro chief Azim Premji had donated about Rs 8,846 crore (his 8.6 per cent stake in Wipro) to a private trust controlled by him, mainly to improve education infrastructure.

According to the family constitution, the 60-year old Rao could continue as chairman of the GMR Group till the age of 70, said sources.

GM Rao’s two sons, Kiran Grandhi and G B S Raju, and son-in-law Srinivas already hold key positions in the group, which has interests in roads, airports, power, aviation and sports.

GMRVF, the group’s corporate social responsibility arm, operates in areas of education, community service, health, hygiene and livelihood, especially in rural areas.

Rao, hailing from Andhra Pradesh, had a substantial interest in sugar and rose to limelight when he sold his 24 per cent stake in Vysya Bank to the ING Group in a Rs 340-crore deal in 2002.