Founders requested to extend support for smooth transition to new leadership: Mindtree

Mindtree, which is undergoing a management rejig after L&T picked up majority stake in the IT firm, Friday said the founders have been requested to support the transition as a new leadership team is put in place.

The construction major's takeover of Mindtree had marked the first hostile acquisition in the country's IT space, and L&T now holds 60.06 per cent stake in the IT firm.

"The focus of Mindtree is for smooth transition to the new leadership team, maintain business momentum and create shareholder value. The founders have been requested to extend their support towards this," Mindtree said in an e-mailed statement.

The company, however, did not respond to specific queries on whether the founders have been asked to stay on till the new management takes charge, and if they intend to remain invested in the company.

At the end of June 2019 quarter, the founders held 13.3 per cent stake in Mindtree.

The takeover process started when L&T bought 20.32 per cent stake in the Bengaluru-based company from V G Siddhartha and his coffee enterprise for over Rs 3,000 crore in March. Subsequently, it picked up more shares from the open market and through an open offer.

L&T's takeover bid had initially been resisted by Mindtree founders, who had termed the attempts as being 'hostile' and had tried to rally support from large investors.

In June, L&T had secured three board positions at Mindtree - bringing in S N Subrahmanyan (L&T CEO and MD), Jayant Damodar Patil and Ramamurthi Shankar Raman as non-executive directors.

L&T Group chairman A M Naik was appointed as non-executive chairman of the IT company earlier this week.

On July 5, founders - Rostow Ravanan, Krishnakumar Natarajan and Parthasarathy NS announced their exit from Mindtree board and the management. Mindtree co-founder Subroto Bagchi, who retires this month, had not offered himself for re-appointment to the board.

Mindtree, in its previous filing, had stated that these officials would stay as board members till July 17, 2019 and as employees in line with their employment contracts to ensure smooth transition.

The company, which had stated it will announce a new leadership team in due course, is yet to name its new CEO.