Reddys, Nagpals To Back Tatas

Embattled Indian Hotels chairman Ajit Kerkar has suffered another blow, with the Reddys and Nagpals deciding to side with Bombay House. The support of the two families, Indian Hotels co-promoters in Oriental Hotels and PIEM Hotels, was essential for Kerkar to realise his hopes of striking a hard bargain with the Tatas.

The Mumbai-based Nagpals own a 40 per cent stake in PIEM Hotels, while 40 per cent is held by Indian Hotels. Kerkar holds 6 per cent of the remaining 20 per cent. He also has a minor holding in Oriental Hotels, in which Indian Hotels has a major stake.

The two promoters have decided to back the Tatas. They will support the new Indian Hotels management, sources close to one of the promoters in Mumbai said. This support could prove crucial as the Tatas attempt to oust Kerkar from the boards of all Indian Hotels subsidiaries.

Although Kerkars term in these companies is not due to end for some time, sources said the Tatas can now oust him from these positions with the support of the Nagpals and Reddys. Kerkar does not own any stakes directly in many of these companies.

The boards of the Indian Hotels subsidiaries are expected to follow the Tata line on Kerkar issue. The boards are expected to await the new Indian Hotels board to take a decision on this issue and tag along, sources said.

Refuting reports that Kerkar had sought to buy out the stakes of the Reddys and Nagpals in the two companies, sources told Business Standard: There is no question of the Nagpals selling their stake. They are committed to the company and the Taj group, and there is a board resolution to this effect.