Shree Cement Pulls Out Of Investment Subsidiary

Shree Cement Ltd, the Rs 556-crore cement maker of the Benu Gopal Bangur group, has pulled out of its investment subsidiary, Mannakrishna Investments Ltd.

Following the divestment, Shree Cement will restrict its operations to making and distribution of cement, while Mannakrishna Investments will be the wealth creator of the family. The Bangur family controls a handful of quoted and unquoted enterprises through Mannakrishna Investments.

Shree Cement joint managing director Hari Mohan Bangur said the move was aimed at converting the group's image of a family-run diversified company to a focused firm.

In order to achieve the cherished status of "an Indian company being managed like a multinational", Shree Cement, he said, would concentrate on wealth creation in the next two years. Advertising guru Alyque Padamsee has been given the mandate of guiding the company to attain the goal.

 

The BG Bangur and Purshottam Dass Bangur groups, which used to manage business jointly since the corporate assets were split among the family factions over a decade ago, had cleared their cross holding in the financial year ending June 2000 following "division of responsibilities " between the two branches.

Alongside, the company proposed to appoint Agnivesh Agarwal as director on the board. The resolution pertaining to the appointment of Agarwal will be placed before shareholders at the company's annual general meeting on October 24.

Agarwal, who was appointed as an additional director in July 2001 following his marriage with Bangur's only daughter Puja, would hold office till the next AGM. Thereafter, fresh approval of the shareholders is required for his appointment as a director.

The proposed appointment of Agarwal is seen by corporate watchers as a succession plan being put in place. When asked Bangur said:" This is not a succession plan. We plan to get benefit from Agarwal's expertise. This is true that my only son, Prasad is not interested in joining cement business at the moment. But it does not mean that he will not look after my business, if situation warrants. Succession plan is something which is dictated by God."

A science graduate, Prasad, 25, is working with Ernst & Young. Agarwal, son of Anil Agarwal of Sterlite group, is a commerce graduate. He is on the board of India Foils and Bharat Aluminium Co (Balco).

Shree Cement is one of the most energy efficient and production cement makers of the company in the world. Its two plants, located in Bewar in Rajasthan, manufacture ordinary portland and portland pozzolana cement. Last year, it reported a 129 per cent capacity utilisation.