Acc To Take Fresh Look At Ties With Bombay House

The board of Associated Cement Companies has decided to study in detail the entire gamut of the companys relationship with the Tata group. The company board, which met here recently, will soon take a decision based on this assessment whether to continue its ties with the countrys premier corporate house or to chalk its own independent path.

The ACC move follows the much-hyped controversy over whether the blue chip cement major is out of the Tata fold or not.

A decision of this nature has to be ratified by the company board, a top source said. The chairman saying that ACC is not a Tata company does not make it so, he added. At present, Tata Tea and Tata Chemicals hold 11.2 per cent stake in ACC. Besides, there are a few Bombay House representatives on the ACC board. If ACC feels that it is not a Tata company then one has to take a view about the shareholding; moreover, it would then not make sense for the Tata representatives to remain on the ACC board, the source said.

 

The ACC top management, too, is divided on the issue. While on the one hand Nani Palkhivala is right when he says that ACC has a strong brand presence and that ACC does not become a Tata company just because the Tata group has a 11.2 per cent stake, on the other being a part of the countrys premier corporate house will definitely help the companys cause, the sources said.

While there is a feeling that if ACC does retain its Tata identity then Nani Palkhivala, who is 77, would have to resign from the chairmanship as per the Tata retirement guidelines, there is another section which feels that the guidelines are far from mandatory. Palkhivala is no longer on the boards of Tata Exports, Tata Consultancy, and Tata Unisys.

It may be mentioned that Darbari Seth, through Tata Tea and Tata Chemicals, had bailed out ACC a few years ago when the company was floating a public issue and its shares had begun quoting below par. Palkhivala had then approached Darbari Seth, Nusli Wadia, Pallonji Mistry and Vasant Seth to save the issue. All four responded by putting in large applications. While Pallonji Mistry and Vasant Seth withdrew subsequently, Nusli Wadia and Darbari Seth had remained in the field, each pressuring Palkhivala to accept his offer and reject the other.

Palkhivala had accepted Darbari Seths offer then and Nusli Wadia had gone to court over the issue. The case is still pending in Bombay High Court.

Today, the strategic management of ACC is with Darbari Seth, a company source added.