Dry cell battery major Eveready Industries on Thursday said its non-executive chairman Aditya Khaitan and managing director Amritanshu Khaitan have resigned following a recent open offer from the Burmans of Dabur.
Suvamoy Saha, currently the joint managing director, will assume charge as the new managing director, Eveready said in a stock exchange filing.
Saha will assume the responsibility as the MD till such time “the same is taken on record by the board on the recommendation of the Nomination & Remuneration Committee of the Board, at its meetings to be convened shortly”.
The Khaitans tendered their resignations with immediate effect in view of the Dabur promoters’ “expression of interest” to enable the company to “benefit from new leadership and direction”, the filing said.
In a letter to the board, Amritanshu Khaitan said as the Burman family, the largest shareholders of Eveready, had expressed interest to take management control of the company and provide new leadership and direction to the company, it would be “appropriate” for him to step down from the board.
“… I will continue to be a long term stakeholder in the company and participate in the future growth plans of the company,” he said. At the end of the third quarter this fiscal, the Khaitans owned 4.84% stake in the Kolkata-based company, while Burmans had 19.84%.
“We have overcome challenging times and I am stepping down from the board on a strong footing, with the company having achieved its highest ever operating profits last year, despite the challenges posted by Covid-19,” he said.
The board of directors of Eveready Industries in August last year had appointed Saha, a non-executive director of the company, as joint managing director, in a move to professionalise the management in the pursuit of high growth. Significantly, appointing a joint MD was in line with what the Burman family wanted.
Dabur India vice chairman Mohit Burman had long been emphasising that the battery maker should be run “professionally”.
On March 1, a day after making the open offer to acquire an additional 26% share of the Khaitans-promoted company, Mohit Burman told FE that his family wanted to acquire control and intended to be a promoter of Eveready as it believed if run “properly in a professional manner” with new talent, the dry cell battery major could grow at a much faster pace and profitably.
The Williamson Magor group flagship Eveready needs to chart out on its own under “a new leadership” and, hopefully, the Burman Group can provide the same, Burman said in an email interaction. “The company needs new direction, and the existing shareholding structure was not tenable. This company now needs to chart out on its own under a new leadership. Hopefully, we can provide the same,” Burman said.
After announcing the open offer, the Burman Group said given its significant shareholding in the battery maker and its intention to acquire control, it has already requested appropriate representation on the board through appointing three directors. Moreover, the Burman family will want to appoint a chairman after the open offer, as per the Sebi guidelines.
“At an appropriate time we would also request the board consider reconstituting the audit committee, the nomination and remuneration committee and other such strategic committees of the board so that the directors have appropriate representation on such committees,” the Burman Group said on February 28.
On Thursday, Eveready’s scrip rose 3.38% on BSE to close at Rs 361 apiece. The company announced resignations of its chairman and MD withing normal trading hours.
The Burman Group on Monday made an open offer to acquire an additional 26% share of the Khaitans-promoted company for Rs 604.76 crore. The mandatory open offer under the takeover regulations was made as the Burmans, already the single largest shareholder in Eveready, proposed to purchase an additional 5.26% share of the battery maker for `122.30 crore, taking their total shareholding to 25.11%.
