- L&T’s takeover of Mindtree marked India’s first-ever hostile takeover in the IT space.
- The IT firm on Friday said it’s Chief Executive Officer Rostow Ravanan, Chairman Krishnakumar Natarajan and Vice Chairman Parthasarathy NS have quit.
Few days after L&T gained control of Mindtree, the IT firm on Friday said it’s Chief Executive Officer Rostow Ravanan, Chairman Krishnakumar Natarajan and Vice Chairman Parthasarathy NS have quit.
As the new owners plan to overhaul the top management at the Bengaluru based company, the speculations of Ravanan on his way out of the organization was doing rounds. Reports suggest that the construction giants have asked him to step down of his office.
Mindtree said in a regulatory filing,”At the board meeting held on July 5, 2019, Krishnakumar Natarajan (Executive Chairman), Parthasarathy NS (Executive Vice Chairman and Chief Operating Officer) and Rostow Ravanan (CEO and Managing Director) have submitted their resignations as members of the board of directors of Mindtree and as employees of the company.”
The filing added that these officials will stay as board members till July 17, 2019, and as employees in line with their employment contracts to ensure a smooth transition.
L&T acquired Mindtree
Earlier this week, it had announced that L&T had acquired control of the company and had been categorized as a promoter with 60.06% stake in the company. L&T held 9.87 crore equity shares in Mindtree as on 2 July following its recently-concluded open offer.
The development brought the curtains down on months of hostile takeover drama at the Bengaluru-based company. L&T’s takeover bid had been strongly resisted by Mindtree founders, who had also tried to rally support from large investors like Nalanda. Nalanda, incidentally, also sold the majority of its holding in the company during L&T’s open offer.
First Hostile Takeover in IT Space
L&T’s takeover of Mindtree marked India’s first-ever hostile takeover in the IT space. The infrastructure giant had bought 20.32% shares in Mindtree from V G Siddhartha and his coffee enterprise for over ₹3,000 crore in March. Before making an open offer for an additional 31% stake, it raised up its control with more share purchases from the open market.
Last month, L&T secured three board positions at Mindtree — bringing in S N Subrahmanyan (L&T CEO and MD), Jayant Damodar Patil and Ramamurthi Shankar Raman. Their appointments are effective 16 July when Mindtree is scheduled to hold its annual general meeting (AGM).
Retiring this month Subroto Bagchi, co-founder of Mindtree had not offered himself for re-appointment to the board.
At the end of March 2019, Mindtree had eight members on its board, including Ravanan, Natarajan, and Parthasarathy. It had four independent directors on its board – Apurva Purohit, Milind Sawarte, Akshaya Bhargava and Bijou Kurien. Shares of Mindtree closed at ₹888.05 on the BSE on Friday, 1.17% lower than the previous close.
This was the first hostile takeover in the Indian IT space. With this big news coming L&T is set to make a host of changes in its subsidiary organization now.