Basant Kumar Birla's daughter Manjushree Khaitan has been named as the chairman of Kesoram Industries, the company said in a filing with the stock exchanges.
At the board meeting held today, Kesoram has redesignated Manjushree Khaitan, the executive vice-chairperson, as chairman of the board with immediate effect. Basant Kumar Birla, who passed away earlier this month, was the chairman of the company.
Khaitan also relinquished her position as executive vice-chairperson with immediate effect and will continue on the board as a non-executive director. Khaitan had been on the board of Kesoram Industries since 2001.
Khaitan felt that as chairman, she should no longer function as an executive director, said sources in the know. "An executive vice-chairperson to replace Khaitan is not being appointed right now. The day-to-day affairs of the company would be managed by whole-time director Chander Kumar Jain," the source pointed out.
Khaitan's appointment as chairman finally settles the issue of succession in Kesoram Industries. Basant Kumar Birla started giving shape to Kesoram succession in 2013 when Khaitan was appointed as executive vice-chairman of the company while he continued as non-executive chairman.
Earlier, in 2010, Basant Kumar Birla had said on the sidelines of Kesoram annual general meeting, that Khaitan would take charge of Kesoram and be in constant touch with grandson, Kumar Mangalam Birla, when asked about the succession plan for the company.
When Basant Kumar first talked about his succession in 2004, he had said that the company would be inherited by a person who was in in charge of overseeing its day-to-day affairs. Under this formula, Khaitan and Jayashree Mohta were to get Kesoram and Jay Shree Tea & Industries.
Kumar Mangalam Birla joined the board of Century Textiles & Industries in 2006 and in 2015 became the vice-chairman of Century Textiles. Earlier this year, Kumar Mangalam wrote to the Securities and Board of India (Sebi) seeking reclassification from a promoter to a public shareholder in Kesoram on grounds of compliance challenges.
The letter mentioned that the classification as a promoter of companies other than those of the Aditya Birla Group, would have compliance challenges.
Kesoram had come close to being declared potentially sick under BIFR in 2016. A web of transactions and fund infusion from the promoters had saved it from the brink of BIFR referral.
Kesoram is now looking at strengthening its tyre manufacturing business by demerging it. The tyre business is being spun off into Birla Tyres.
Separate meetings of equity shareholders, secured creditors and unsecured creditors would be convened next month on directions from the National Company Law Tribunal (NCLT) to approve the scheme of arrangement.