 | « Back to article | Print this article |
"I am a friendly man," says Anil Nanda, chairman of Goetze and vice-chairman and managing director of Escorts Ltd, sitting in his tastefully decorated study in New Delhi's tony Friends Colony neighbourhood.
Quiz him about the dozens of 18th and 19th century pistols hanging from the walls of the study, and you will be told that these are only dummies he picked up from souvenir shops.
Indeed, the late Har Prasad Nanda's second son has for years carried the reputation of being a gentleman and not a gutter-fighter businessman.
Till three days ago. Anil fired his first salvo during an Escorts Ltd board meeting on 29 July. An earlier board decision to sell a 16 per cent stake in Escorts Heart Institute and Research Centre Ltd, an 80 per cent Escorts subsidiary, to Merlion India for Rs 65 crore (Rs 650 million) had come up for ratification.
Taking the other directors, more so his elder brother and Escorts chairman and managing director Rajan Nanda, by surprise, Anil put up a dissenting note.
EHIRC, which runs the hugely successful Escorts Heart Institute in Delhi, was set up by his father in 1984 at the peak of his battle with London-based Swaraj Paul as a charitable trust with donations from various businessman.
It retained this character till November 1999, six months after the death of HP Nanda.
Also Read:
Anil Nanda quits five group firms
At that time, Anil says, this trust was merged with another trust bearing an identical name and registered in Chandigarh.
Subsequently, this charitable trust was converted into a company and its share capital was fixed at Rs 2 crore (Rs 20 million), subscribed 80 per cent by Escorts, 10 per cent by investment companies of Rajan and 10 per cent by Dr Naresh Trehan.
Anil's principal objection is simple: a charitable trust cannot be converted into a company. Once the anomaly is discovered, it will tarnish the reputation of the directors of the company as it was done with their consent.
After giving the dissent note on 29 July, Anil has written to all the other 10 directors of Escorts to undo the wrong.
But why is Anil raising his objection now and not when the conversion into a company took place? His explanation is that he was not aware of it. "Only when reports came out that EHIRC is looking for a partner that people told me that this cannot be done," he says.
On his part, Rajan denied any wrongdoing and said that everything was done as per law. He also questioned Anil's locus standi: he is neither on the board of EHIRC nor does he have an executive role in Escorts Ltd. In fact, he said, an agreement has been reached that Anil will dissociate from all Escorts companies.
To be sure, Anil has slowly been carving out his own auto-components business out of the Escorts empire. When Escorts decided to exit from its 50:50 joint venture with Mahle called Escorts Mahle in favour of the foreign partner, Anil stepped in and offered to buy out both the partners for Rs 38 crore (Rs 380 million).
This company was subsequently merged into Goetze. Then, a few months ago, Anil bought out Escorts from Goetze to become its promoter. (He holds a little over 7 per cent in the company.) Riding the boom in auto components, Anil hopes to grow Goetze from around Rs 400 crore (Rs 4 billion) to Rs 1,000 crore (Rs 10 billion) in five years with at least 20 per cent of the projected turnover from the overseas markets.
When asked whether he will separate from his brother and start an Anil Nanda group, he said "Why should I leave Escorts. It is my father who build this company from scratch. I have my memories attached to it. And I am what I am because of him and Escorts."