FIs up role in Birla Corp

The financial institutions may increase their involvement in the day-to-day affairs of Birla Corporation, the flagship of the M.P. Birla gro...

The financial institutions may increase their involvement in the day-to-day affairs of Birla Corporation, the flagship of the M.P. Birla group, even as the battle rages on between the Birla families and Rajendra S. Lodha, co-chairman of the company, over the estate of the late Priyamvada Birla.

Top FI sources said, a move was under way where two FI nominees may be inducted into the committee of directors of the company’s board. This would mean that the FIs can then keep themselves updated on the daily affairs of the company. The FIs currently have three nominees on the Birla Corp board.

The chairman of one of the FIs said, “While nothing has been decided on institutions joining the committee of directors, the FIs may be interested as that would give us a closer understanding of how Birla Corp is being run.”

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The committee of directors was an internal arrangement of the board to ensure that the company’s operations carry on smoothly, since the board cannot meet that often. The committee currently comprises R.S. Lodha, Harsh Lodha and KC Mittal, managing director of the company. Two more FI nominees joining the committee may give the institutions a greater role in its affairs.

While Lodha, as co-chairman of the company, chaired the important board meeting on Monday, there was no word yet on who the next chairman of the company would be. When asked about the next chairman of the company, a top FI official said, “We will cross that bridge when we come to it”.

UTI, IDBI and ICICI Bank have their representatives on the company’s board. A greater role in the affairs of Birla Corp for the FIs will also be of significance for the institutions. Sources said the Tuesday board meeting passed off without any drama despite the enormous interest the meeting generated in the light of the Priyamvada Birla will controversy.

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