In a parting of ways, Escorts vice-chairman and managing director Anil Nanda has resigned from the boards of five companies of the Escorts Group, managed by elder brother, CMD Rajan Nanda.
"There has been a settlement between us that he will resign from all Escorts companies and will not seek re-appointment to the Escorts Ltd board when his term expires in 2006," Rajan Nanda told Business Standard.
The companies from which Anil Nanda has resigned include Escotel Mobile Communications Ltd, Escorts Finance and Investments, Escotrac Finance and Investment, Charat Ayurvedic and Escorts Auto Components.
Rajan Nanda said the agreement with his brother was signed after Escorts Ltd decided to sell its stake in automobile component firm Goetze Ltd to Anil Nanda a few months ago.
However, Anil Nanda said he had resigned from the board of these five companies owing to the new regulations stipulating that a person could not be on the board of more than 12 companies.
"Anyway, I was not involved in the running of these companies," he said. "Whether I continue or not on the Escorts board is for it to decide."
The differences between the brothers came to the fore at an Escorts board meeting on Tuesday, in which Anil Nanda objected to an earlier board decision to divest 16 per cent stake in Escorts Heart Institute & Research Centre Ltd in favour of Merlion India for Rs 65 crore (Rs 650 million) on the grounds that the company had been carved out of a charitable trust in 1999 against the law.
"I want to correct this mistake. Otherwise, the reputation of the board will be affected," he said.
"Everything has been done as per the law. We converted it into a company because there are restrictions on societies so far as investments and joint ventures are concerned. All the big players in healthcare like Max India, Apollo and Wockhardt are corporatised," Rajan Nanda said.
One of the investors in Merlion India, he said, was Tamasak of Singapore. "With its participation, we can take medicine to rural India," Rajan Nanda said.
"My brother's dissent came as a surprise to me. He is not on the board of the healthcare company and has no executive role in Escorts." The dissent, he asserted, would not hold back the proposed divestment.
