March 26, 2010 3:24:23 am
Battlelines have been drawn for what could be a protracted dispute among board members of Kasturi & Sons,the publisher of The Hindu and The Hindu Business Line.
Stripped of his powers by publisher and group Editor-in-Chief N Ram,Managing Director and his brother N Murali has hit back saying that he will not quit. And that he would try to make Ram see reason and retire as Editor-in-Chief as committed by him in September 2009 and ensure a smooth transition.
Ram,incidentally,has denied that he made such a commitment.
Some members of the Board of Directors have been trying to systematically undermine and erode my authority and responsibilities and rights and obligations, Murali wrote in an email to colleagues in the company today. I will not allow that to happen.
Murali,as The Indian Express reported today,is said to have proposed a retirement age for members of the board one of the hot-button issues that polarised the board.
The board is split with one faction proposing that all directors retire at 65. Ram turns 65 in May. The other faction is opposed to the proposal.
Murali was blunt in his email: At the Board meeting on 20th March,some Directors subjected me to utter humiliation and attempted disempowerment. I will resist all attempts to deny me my rights,responsibilities and duties as the Managing Director.
When contacted by The Indian Express,Murali said his email was in response to a circular sent by Ram to heads of departments announcing a change in his designation and his role.
The circular was sent announcing my re-designation as senior managing director whereas I am currently the managing director. Along with this,all my powers were substantially and purportedly removed. My post has been given to another board member, said Murali. My responsibilities have been farmed out to some other members on the board.
While Murali declined to name the new appointee,sources said K Balaji,the younger brother of K Venugopal,currently the joint editor of The Hindu Business Line,has been appointed as managing director in place of Murali by the faction supporting Ram.
In an email response to The Indian Express yesterday,Ram had declined to comment on Balajis appointment saying it was an internal matter of the board of directors.
Meanwhile,some members of the board posted messages on Twitter indicating their stand in the fight. Responding to a message from Ram on his decision to initiate defamatory proceedings,civil and criminal,against The Indian Express and The Financial Express,N Ravi,his younger brother and also a board member,said: When The Hindu has taken a strong stand against criminal defamation,to use it as a threat to silence journalists does seem strange.
Another board member Malini Parthasarathy said in her message: As journalists,why should we be afraid of public scrutiny?
Besides the proposed retirement age,another bone of contention among the family members is the appointment of two children of two board members in senior editorial positions in the US and Europe.
Sources in the group said the anti-Ram faction raised objections to the manner in which these appointments were made. Ram,in his email response yesterday,maintained any appointment of a relative of a Director that needed approval by both the Board of Directors and Shareholders before going to the central government was approved unanimously,without a murmur of dissent by any Director or Shareholder.
Sources in the company,however,said that three shareholders of the company expressed their concerns. They are Muralis children Kanta and Krishna and Ravis daughter Aparna.
In fact,in a strongly worded letter to board members,all three of them questioned the manner in which family members were appointed. They wrote: It is essential that the Board considers issues of corporate governance and the appointment of family members seriously. To point out the obvious,the business cannot accommodate every member of the family,particularly when there are no institutional mechanisms in place to prevent the receipt of unjustifiably large entitlements over a long period of time. Each of us,whether in the previous,current or next generation,has received and continues to receive tremendous benefits from Kasturi and Sons,which far outweigh those received by non-family employees. It is high time that we recognize that our privileges are derived primarily from the contributions and loyalty of over 3500 non-family employees. Each one of us has,in some way or the other,abused their loyalty,trust and contribution.
The inequitable and arbitrary system that currently exists is not only unfair to non-family employees but to shareholders as a class as well. If there is ever any intention of instituting sound and modern corporate governance practices and discontinuing the feudal system that exists,then issues such as the ones we have raised need to be addressed squarely,honestly and without fear or favour.
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