Anand Jain, so far a director, is becoming the chairman of the company in place of his father, J K Jain, who has been designated chairman-emeritus. Anand Jain's younger brother Virendra has resigned as managing director three-and-a-half-years before the expiry of his tenure. As per the company's 2007 balance sheet, Virendra was appointed in 2006-07 as the MD. In the new set-up, Virendra will be a non-executive director and vice-chairman.
Anand Jain's elder brother Satyapal, a director of the company and who was MD till January 2007, is also leaving. However, his 28-year-old son, Gaurav Jain, has been appointed as the MD. Though the company announced the reshuffle to the Bombay Stock Exchange earlier this month, it did not cite any reasons.
When contacted, Anand Jain attributed the reshuffle to professionalise the board as per good corporate governance practices. "There is no change in the company's shareholding pattern," he said. Corporate observers said Anand Jain's son, Harsh, 23, is too young to join the company's board. Jai Corp was started in 1995 by the Jain brothers and all of them ran the company jointly.
However, since the split between the warring Ambani brothers, Jai Corp is getting into businesses in which the Anil Ambani group has a presence. As per the no-compete clause of the June 2005 demerger agreement between the Ambani brothers, both cannot enter each other's businesses.
Jai Corp is spearheading many new initiatives of Mukesh Ambani. In an extra-ordinary general meeting held in March this year, the company proposed to raise Rs 5,000 crore from banks and financial institutions and invest another Rs 7,500 crore in acquiring companies engaged in the real estate and infrastructure sector.
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The company also sought the shareholders' approval to get into the power, communications, water and infotech businesses. As per the BSE statistics, the Jain family currently holds 57 per cent stake in the company.
The company's shares are now traded at a flat Rs 372. Interestingly, in October 2007, the shares were making history in the stock markets after this little-known company sold shares worth Rs 2,800 crore to a clutch of leading foreign investors such as Blue Ridge and Tiger.
The Jains sold 12.6 per cent of their 87.7 per cent stake at Rs 1,035 a share this month.