The Escorts Group, promoted by the Delhi-based Nanda family, is in the throes of a financial restructuring as well as management-level reshuffle.
As part of the initiative, the company announced that Nikhil Nanda, son of Escorts Chairman Rajan Nanda, has been appointed the group chief operating officer.
As a significant step, the father and son moved ahead to ensure their family's presence in all the companies of the group, prompted by default on debenture-related payments to ICICI Bank.
Meanwhile, the company's board was reconstituted -- reinstating some of the directors, who had resigned of late.
According to industry sources, Escorts has had debenture-related payments worth about Rs 50 crore (Rs 500 million) outstanding for close to a year to ICICI Bank. Had the year mark been pierced, under the regulations, the company's directors would become ineligible to hold positions on the board of any other company.
Therefore, Nikhil Nanda resigned from the board of Escorts Ltd, while his father continues to hold his position. Nikhil will continue as director on the boards of all the other group companies, ensuring that at least one director is from the family on the board of each company.
Had both father and son continued to be directors of Escorts, it would have necessary for them to resign from the boards of other companies.
"The company is currently in the final stage negotiations for financially restructuring its balance sheet by injecting funds into operations and replacing high-cost debt," Rajan Nanda said in a company statement.
Escorts had reconstituted its board of directors following a spate of resignations. S A Dave, former chairman, UTI; M G K Menon, former Union minister; P S Pritam and S C Bhargava will be directors on the reconstituted Escorts board.
According to a company statement, other outgoing directors, notably Nimesh Kampani, an investment banker, and Y H Malegam, a capital market expert, will continue to "support the company in the advisory capacity".
On Wednesday, the company appointed two employees S C Bhargava and N K Pandey as directors.