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June 30, 2001
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Money > Business Headlines > Report June 30, 2001 |
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'Lack of time made BK Modi give up'Bhupesh Bhandari Bhupendra Kumar Modi vested managerial control of Modi Rubber Ltd with his brother Vinay Kumar Modi as he was unable to give full attention to the company, according to Modi Rubber chairman Panduranga Rao. "With his several successful businesses, B K Modi was not able to devote a lot of time to this company. What we have done is to ensure that the company gets the due attention from its managing director," Rao said. In a boardroom coup on Thursday, all managerial powers of Modi Rubber were vested with V K Modi. Earlier, while B K Modi was looking after production, V K Modi was in charge of sales and marketing. Each brother was designated managing director. However, Rao clarified that B K Modi has not been stripped of his designation of managing director. He also continues to serve on the company's board. "He continues to be our esteemed colleague on the board," Rao added. Elaborating on Thursday's special board meeting, Rao said that senior executives were asked to come and explain the losses of the company in the last two years. When they did not attend, they were suspended. "They were issued show cause notices to give clarifications for income and expenditure when the company was making losses. But they did not furnish the required information to the board," Rao said. When asked to disclose the identity of the three senior executives who have been suspended, Rao said: "They are fairly senior people in the company," adding: "Even if B K Modi would have been present at the meeting, he would have approved of the action." However, sources in the company said that the three employees are chief executive B K Gupta, R L Ahuja and Atul Prakash. Thursday's meeting was attended by five of the seven board members -- the four nominees of the financial institutions including Rao who is a nominee of the Unit Trust of India and V K Modi. B K Modi and the representative of Continental AG of Germany, with which Modi Rubber has a technical collaboration, were not present. "Sufficient notice was given to all board members for the meeting," Rao said. Rao also insisted that the whole affair will not have any impact on the ongoing open offer by the Modi brothers for a 35 per cent stake in Modi Rubber at Rs 90 per share. The offer closes on 3 July. The brothers jointly control a 24 per cent stake in the company. Powered by YOU MAY ALSO WANT TO READ:
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