While billionaire Ajay Piramal is likely to step down as chairman of Shriram Capital (SCL), holding company of the Shriram Group’s financial services business, founder R Thyagarajan might oversee the company until the board of directors identifies a replacement, according to sources.
Thyagarajan was not available for comment immediately. SCL did not respond to an e-mail. While Thyagarajan has not been on the board at SCL for more than a decade, he has been part of the Group’s major strategic decisions in an advisory role. The sources say Thyagarajan has requested Piramal to continue as chairman even after exiting the group.
Piramal took over as chairman in the second half of 2014 and has been in exit mode; he has sold his Piramal Enterprise’s (PEL’s) entire 9.96 per cent stake in Shriram Transport Finance Company (STFC). STFC is one of the two listed entities of Shriram Capital and PEL sold its stake earlier this year for Rs 2,300 crore, to a clutch of 26 investors.
Ajay PiramalIt also has stake in Shriram City Union Finance and could sell its stake in this entity, too. Besides, the company is expected to sell its stake in SCL, thus exiting from the group. With this, the group is in discussion to identify a new chairman and, say sources in the know, the names that have come up include some who have been working with the firm for decades. This includes T Jayaraman, a co-founder of the group, and S Natarajan, who joined in 2002 and played a key role in restructuring various businesses.
Thyagarajan, known in the financial services sector as RT, gave up control of the group to the Shriram Ownership Trust in 2006, through which 40 top management officials received a stake of 1-2.5 per cent in the Group. Arun Duggal, who has been on the board of various companies, was chairman of SCL almost from the same year till 2014, when Ajay Piramal took over from him. With Piramal coming in as a strategic investor, the plan was to hand over control of the Group to him. Thyagarajan had been planning to support the non-financial services businesses and continue to play the role of an advisor.