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June 29, 2001
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Money > Business Headlines > Report June 29, 2001 |
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VK wrests managerial control of Modi RubberBS Corporate Bureau In a board room coup in New Delhi on Thursday, the board of directors of Modi Rubber conferred all managerial powers of running the company on Vinay Kumar Modi. The board came down heavily on senior company executives considered to be close to Bhupendra Kumar Modi. According to sources, these executives have been stripped of their powers. While BK Modi was looking after production, VK Modi was in charge of sales and marketing. Both the departments will now be looked after by VK Modi. When contacted by Business Standard, BK Modi, who is away in Singapore, declined to comment on the developments. The two Modi brothers have jointly made an open offer for a 35 per cent stake in Modi Rubber at Rs 90 per share. The open offer closes on July 3. The brothers jointly have a 24 per cent stake in the company. The board of directors met under the stewardship of its new chairman Panduranga Rao. Rao recently replaced Bodhishwar Rai as the chairman of Modi Rubber. Apart from other things, the board met to consider the auditors' report. The financial institutions collectively hold a 44 per cent stake in Modi Rubber and are the largest shareholder. The current chairman is a nominee of the FIs. The institutions had earlier put their entire 44 per cent stake for sale, but in vain. Subsequently, the Modi brothers came up with their open offer. Thursday's developments add a new twist to the ongoing imbroglio. Brothers, VK Modi and BK Modi are the sons of late Gujar Mal Modi. After the division of the Modi family in 1989, the brothers were given joint control of Modi Rubber. In the prospectus to the open offer, the brothers have stated that they wish to hive off the non-tyre businesses of Modi Rubber and induct a foreign partner into the company. The Modis are known to have been in touch with Continental AG of Germany. While VK Modi has interests in floatglass apart from Modi Rubber, BK Modi has interests in the telecom business. Meanwhile, the Bombay high court on Thursday adjourned the case filed by MK Modi against Sebi to July 2. Sebi officials said that the judge heard the arguments presented by both the sides and adjourned the case without passing any order. MK Modi had filed the appeal against Sebi prohibiting him from participating in the open offer for Modi Rubber by the BK-VK Modi combine. In a related development, the Delhi high court hearing yet another suit filed by MK Modi over the same issue told him to approach Sebi in the matter. Powered by YOU MAY ALSO WANT TO READ:
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