HERO REALIGNS OWN­ER­SHIP; YOUNGER BROTHER SUNIL MUNJAL TO LEAVE

Business Sphere - - In The News -

In an own­er­ship split at USD 5-bil­lion Hero Group, Sunil Munjal will leave the flag­ship Hero Mo­toCorp, headed by his el­der brother Pawan, and will fo­cus on some other group en­ti­ties be­sides pur­su­ing his other in­ter­ests. The 'own­er­ship re­align­ment' comes within months of Hero Group pa­tri­arch Bri­j­mo­han Lall Munjal's death in Novem­ber last year. Af­ter end of his ten­ure at the two-wheeler ma­jor on Au­gust 16, Sunil Kant Munjal will fo­cus on some of the other group busi­nesses in­clud­ing Hero Cor­po­rate Ser­vice and its al­lied com­pa­nies as the Chair­man, while he also pur­sues new busi­ness in­ter­ests. "With the bless­ings of San­tosh Munjal, the ma­tri­arch of the Munjal fam­ily, Sunil Kant Munjal, Joint Manag­ing Direc­tor, Hero Mo­toCorp Ltd and Chair­man, Hero Cor­po­rate Ser­vice, realigns his busi­ness/part­ner­ship stake in the Hero Group," a state­ment is­sued by BML Munjal fam­ily said. As part of the re­align­ment, he will fo­cus on some of the other group busi­nesses in­clud­ing Hero Cor­po­rate Ser­vice and its al­lied com­pa­nies as the Chair­man, while he also pur­sues new busi­ness in­ter­ests, it added. "Our dear fa­ther, late Dr Bri­j­mo­han Lall, al­ways en­cour­aged us to spread our wings while we re­main a close-knit fam­ily. In keep­ing with that spirit, all of us within the fam­ily unit unan­i­mously be­lieve that our di­ver­si­fi­ca­tion drive needs a fur­ther fil­lip in or­der to ex­pe­dite the growth tra­jec­tory," Sunil Munjal said. Sunil is the youngest of the four Munjal sib­lings. "This is also an ex­cit­ing time for me to con­sol­i­date and strengthen some of the ex­ist­ing busi­nesses and to ex­plore new op­por­tu­ni­ties that are close to my heart," he added. Com­ment­ing on the de­vel­op­ment, Pawan Munjal, Chair­man, Manag­ing Direc­tor and Chief Ex­ec­u­tive Of­fi­cer, Hero Mo­toCorp Ltd, said this is a step to fur­ther stim­u­late the im­mense di­ver­si­fi­ca­tion op­por­tu­ni­ties that the Hero Group en­vi­sions for it­self, while en­abling fam­ily mem­bers to pur­sue their own as­pi­ra­tions.

"Sunil has been a pil­lar of strength and a key mem­ber of the lead­er­ship team, and we wish him all suc­cess in his new en­deav­ours. We, at Hero Mo­toCorp, are grate­ful for his con­tri­bu­tion dur­ing his ten­ure as Joint Manag­ing Direc­tor and we will con­tinue to draw upon his guid­ance in the fu­ture. We whole­heart­edly en­dorse his de­ci­sion to ex­plore new av­enues and will stand by him when­ever he needs any sup­port," he added. The re­align­ment, to be ef­fec­tive from the Au­gust 16 2016, is in con­tin­u­a­tion of the re­struc­tur­ing process started by late Dr Bri­j­mo­han Lall, founder of the Hero Group, in May 2010, the state­ment said. Hero Group is a di­ver­si­fied busi­ness en­ter­prise with an es­ti­mated turnover of USD 5 bil­lion. The busi­ness ven­tures of the Hero Group span across sec­tors in­clud­ing two-wheel­ers (Hero Mo­toCorp), au­to­mo­tive com­po­nents (Rock­man In­dus­tries), NBFC (Hero FinCorp), re­new­able en­ergy (Hero Fu­ture En­er­gies), elec­tron­ics (Hero Elec­tronix), ed­u­ca­tion (BML Munjal Univer­sity), steel cold rolling (Hero Steels), in­sur­ance distri­bu­tion (Hero Cor­po­rate), real es­tate (Hero Re­alty), BPO (Hero BPO) and train­ing (Hero Mind­mine). The re­align­ment will not im­pact the over­all pro­moter share­hold­ing, strate­gic di­rec­tion or op­er­a­tional man­age­ment of the two wheeler ma­jor. In Au­gust 2013, the com­pany an­nounced plans to en­ter 50 mar­kets by 2020 with a tar­get of 20 man­u­fac­tur­ing fa­cil­i­ties across the globe and an over­all an­nual turnover of Rs.60, 000 crore. It aims at get­ting 10 per cent of an­nual sales from ex­port mar­kets, at around 1 mil­lion units, by 2017. The com­pany has set a cu­mu­la­tive sales tar­get of 100 mil­lion units by 2020, hav­ing crossed the 50 mil­lion mile­stones al­ready. Hero Mo­toCorp sep­a­rated from Honda Mo­tor Co. Ltd in 2011 and has aug­mented its global pres­ence, sell­ing prod­ucts across var­i­ous coun­tries, in­clud­ing Peru, Gu­atemala, Turkey and Egypt and Colom­bia. The com­pany has es­tab­lished as­sem­bly units in Kenya, Tan­za­nia and Uganda in East Africa through its dis­trib­u­tors. It has also set up a plant in Colom­bia to cater to Latin Amer­i­can mar­kets. Fur­ther it plans to set up fa­cil­i­ties at Mex­ico, Ar­gentina and Brazil.

RAJAN SAYS WAS OPEN TO SEC­OND TERM

Days be­fore he demits of­fice, Re­serve Bank of In­dia (RBI) Gover­nor Raghu­ram Rajan de­cided to fi­nally an­swer ques­tions about his so­called anti-gov­ern­ment speeches as well as per­sonal at­tacks on him. He termed the po­lit­i­cal at­tacks as ad hominem and said he was open to stay­ing a bit longer to com­plete the un­fin­ished work of bank clean up, but is per­fectly happy to go. Rajan, who had in June de­cided against seek­ing a sec­ond term af­ter 3-year ten­ure which ends next month, said the process of di­a­logue with the gov­ern­ment did not reach a stage where he could have agreed to stay on. He said how­ever that he was never wor­ried about reap­point­ment or a fu­ture ca­reer in gov­ern­ment and did the best in the in­ter­est of the coun­try and he was the "best team player". Rajan, who plans to re­turn to academia af­ter his term ends on Septem­ber 4, said his stays at univer­sity made him "pretty thick skinned", but the at­tacks then were not ad hominem. "Some of these (re­cent) at­tacks were ad hominem, that is im­put­ing sort of mo­tives, al­leg­ing things com­pletely with­out any ba­sis," he said in tele­vi­sion in­ter­views adding that he put them aside and did not pay any at­ten­tion to them. To­wards the end of his three-year ten­ure, Rajan faced per­sonal at­tacks from BJP MP Subra­ma­nian Swamy who had al­leged that the former IMF chief econ­o­mist was not "men­tally fully In­dian" and sent con­fi­den­tial and sen­si­tive fi­nan­cial in­for­ma­tion abroad. Rajan said when peo­ple asked him if he was open to the sec­ond term; he said that al­though he had struc­tured all his ini­tia­tives at RBI with a three-year hori­zon, there was some un­fin­ished work like PSU banks' bal­ance sheet cleanup and set­ting up of mon­e­tary pol­icy com­mit­tee frame­work. "That does not mean in any way, that I was ab­so­lutely hell bent on hav­ing a sec­ond term," he said. "I was open for stay­ing a lit­tle while longer to see them com­plete, but at the same time I was per­fectly happy to go." Rajan said 90-95 per cent of the job that he had taken on was com­plete and he had ab­so­lute free­dom in do­ing his work. On his fu­ture plans, he said: "I have said again and again, I am fun­da­men­tally a aca­demi­cian. This (RBI Gover­nor) is my side job". Asked if crony cap­i­tal­ists had a hand in his not get­ting an ex­ten­sion, Rajan said: "I don't think you should at­tribute this to some hid­den hand. I feel, I have done what was needed to be done, if they had such power they would have stopped me (from do­ing) what was needed." Stress­ing that he had ab­so­lute free­dom in do­ing, what­ever he wanted to do, Rajan said this re­quired lots of work be­hind the scenes, with gov­ern­ment and per­suad­ing gov­ern­ment. "So when peo­ple say you have been fight­ing all the time, ab­so­lutely not. Great re­la­tion­ship with pre­vi­ous gov­ern­ment as well peo­ple who mat­ter in this gov­ern­ment...," he said. Rajan said le­git­i­mate crit­i­cism like fo­cus­ing too much on in­fla­tion can be ad­dressed and he has tried to con­vince pub­lic about his stand through his speeches. Stat­ing that the coun­try needs in­sti­tu­tional re­form to build a plat­form for strong and sus­tain­able growth, Rajan cau­tioned against in­fla­tion­ary spi­ral in try­ing to push do­mes­tic de­mand led growth. "I keep say­ing, it is a no brainer to gen­er­ate growth when the rest of the world is grow­ing strong; when it is ex­port led growth, you don't need in­sti­tu­tional change," he said. Stress­ing that RBI is an en­tity which has con­ser­va­tive ap­proach as fo­cuses on sta­bil­ity, Rajan said that in tak­ing de­ci­sions he did not worry about his fu­ture ca­reer prospects. "Wher­ever we had to say 'no', I have never wor­ried about reap­point­ment, or about whether I will have a fu­ture ca­reer in the gov­ern­ment or any­where else. I have said 'no' when I think it is in the best in­ter­est of the coun­try and I think in that way, I am be­ing the best team player that I can pos­si­bly be. If I go along just for be­ing com­fort­able, I think we will be build­ing risk for the fu­ture which will re­ally hurt the coun­try," he said. Asked if his talk­ing straight at­ti­tude went against him, Rajan said: "I am not go­ing to spec­u­late, I think the bot­tom line is there was no con­sen­sus and that's where it stopped". He said af­ter three-and-a-half years at IMF and four years in In­dia, he did not want to la­bel him­self as a ca­reer bu­reau­crat, or a ca­reer tech­no­crat. "It is more where I can im­ple­ment ideas, im­ple­ment re­form pro­gramme. This was ab­so­lutely a job I wanted to have, we worked to­gether as a team in the RBI, we had a fan­tas­tic team and we made great deal of dif­fer­ence. Did I come in with three years (in mind)? Yes ab­so­lutely... I am not say­ing I had in mind full stop at the end of it. But ev­ery­thing I wanted to do was struc­tured for a three year hori­zon." On Prime Min­is­ter Naren­dra Modi, he said what­ever he will say will be "prob­lem­atic". Rajan, whose ten­ure at RBI has been marked with sev­eral con­tro­ver­sies trig­gered by his com­ments on is­sues rang­ing from tol­er­ance de­bate to the gov­ern­ment's flag­ship pro­gramme 'Make in In­dia', was asked to de­scribe Modi in a tele­vised rapid-fire like in­ter­view.

Sunil Kant Munjal, Joint Manag­ing Direc­tor, Hero Mo­toCorp Ltd.

Raghu­ram Rajan, Gover­nor, RBI

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