Bat Not To Seek Yogis Removal

A senior spokesmen of BAT Industries when contacted in London told Business Standard that the removal of Deveshwar was "not on the agenda of the board meeting".

The FI stand was made clear during a meeting between BAT representatives led by Tony Johnston and heads of financial institutions in Bombay on Tuesday. BAT representatives had come to India after the Enforcement Directorate arrested six key executives of ITC Ltd, including former ITC chairmen J N Sapru and K L Chugh.

The BAT decision comes after the finance ministry and the FIs have taken the view that Deveshwar would not be removed. A ministry official told Business Standard that "I will be surprised if the FIs force a change in the management now. Instead, they would wait and watch for more evidence before taking any decision". The official, however, clarified that the chairman will be removed if "they suspect that he had any mala fide intentions".

 

The official also ruled out allowing BAT to take control in ITC. He said: "They are also involved. So how can we allow them to run the company."

Sources said the finance ministry was in close consultations with the financial institutions on the ITC affair. "On all crucial issues, there are mutual consultations before the FIs finalise their stance," the source said. Elaborating, the official said earlier when the number of the FI nominees on the board was raised, the ministry had been kept informed.

The BAT decision not to insist on Deveshwar's removal for the time being is understandable given the FI stand. The logic behind the FI decision is based on the premise that they will continue to support the chairman of any company in which they have a substantial stake until the corruption charges against him are proved or there is proof of gross mismanagement.

In ITC's case the directorate is yet to find direct evidence of Deveshwar's personal involvement in the violations. Moreover, he has been at the helm of affairs for less than a year which is too short a time for him to put the ITC house in order.