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BS REPORTER New Delhi, 28 March
The battle in the boardroom of Kasturi & Sons, which publishes The Hindu and The Hindu Business Line newspapers, looks poised to intensify. Former
managing director N Murali, who has been re-designated as senior managing director, albeit with pruned responsibilities, has for the first time come out with his version of the events.
Murali, in his words, has been “singularly targeted, utterly humiliated and sought to be disempowered by being divested of all substantial powers and responsibilities”.
In a board meeting on March 20, Murali, the brother of the group’s Publisher and Editor-in-Chief N Ram, was re-designated and given independent charge of circulation. He is
also to share responsibilities for accounts and industrial relations with new Managing Director K Balaji.
Earlier, Murali had wideranging powers across departments. The move was opposed by some directors on the board, though Ram maintains that Murali himself agreed to his re-designation as it was a part of succession planning.
Murali refutes that. “The changes purported to have been made in respect of my substantial powers and responsibilities cannot be construed as part of succession planning, as Ram claims. Any succession planning cannot be in respect
of one individual alone and that too confined only to the non-editorial side. There was nothing done on the editorial side as Ram has reneged on his commitment to retire in May 2010.” Kasturi & Sons has 12 board members. The families of each of four cousins, who together control the entire equity, have three members on the board. There are just under 50 shareholders — all of them members of the Kasturi Ranga Iyengar family. The cousins were G Narasimhan (father of N Ram, N Ravi, N Murali), S Parthasarathy (father of Malini Parthasarathy, Nirmala Lakshman and Nalini Krishnan), S Rangarajan (father of Ramesh Rangarajan, Vijaya Arun and Akila Iyengar), and G Kasturi (father of K Balaji, K Venugopal and Lakshmi Srinath). Members of the families of the four cousins — sons of Kasturi Srinivasan and Kasturi Gopalan (the second-generation owners) — own 25 per cent equity each.
The battle for succession first came into the open after The Indian Express reported apower struggle in the venerable The Hindu’s boardroom, largely over Ram’s alleged reluctance to retire when he turns 65 this May. Ram has threatened defamatory proceedings, civil and criminal, against the editors and publisher of The Indian Express.
Explaining the sequence of events which resulted in the now contentious move to fix the retirement age at 65 for all directors in key positions, Murali says: “The retirement age of 65 was the norm proposed by me on September 25, 2009, in an email to all the members of the board of directors. It was only after this email and after another mail of the same date by me, N Ravi and Malini Parthasarathy on the need for editorial re-organisation that Ram called an informal meeting of the editorial members of the board
of directors on the same day, at which he agreed to his retirement at the age of 65 in May 2010. An editorial succession framework was also agreed.” Ram has said the key decisions of the March 20 board meeting were taken either by amajority of 9-3 or unanimously, depending on the resolution and the subject. He also made it clear that the written record showed no retirement age, 65 or otherwise, was specified for directors. He says no board meeting was held in September 2009 at which he agreed to step down at 65.
Ram however did not reply to an email from Business Standard requesting him to respond to Murali’s version.
Murali points out that even without the minutes of the board meeting of March 20 being finalised and circulated, as required by corporate law and practice, excerpts of the minutes have been put up on the notice board in various places of The Hindu’s office. Murali says he has not got a copy till now.
Some of the board members also seem to have raised questions on the appointment of Ram’s daughter Vidya as the London correspondent and nephew Narayan Lakshman as the Washington correspondent of The Hindu. Under central government rules, a decision to include a family member in the organisation with a remuneration of more than Rs 50,000 a
month requires its clearance.
Ram maintains he had declared that he had an interest in Vidya’s appointment and did not participate in any matter in the board meeting which he should not have.
Murali says Ram not only initiated but also participated in and signed the circular resolutions of March 3 and March 4, which deal with the manner and content of the reply of the company to the central governments letter asking for clarifications on the appointments.
Ram says the two appointments of relatives of directors had been done meticulously in accordance with the requirements of the law: Approval by the board, approval by the shareholders, and central government approval. There was no violation of any kind.
In a board meeting on March 20, N Murali, the brother of The Hindu group’s Publisher and Editor-in-Chief N Ram, was re-designated with pruned responsibilities. The move was opposed by some directors, though Ram maintains that Murali himself agreed to this, as it was a part of the succession plan.
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