BK Birla heir for 3 firms soon

Basant Kumar Birla, patriarch of the Rs 5,000 crore B K Birla group, will decide who will inherit Mangalam Cement, Mangalam Timber and ECE Industries "" three of his smaller companies "" over the next six months.

A top source at Birla Buildings, headquarters of the group, said B K Birla would bequeath management control of these firms to his heirs once the issue of who will inherit the Rs 2,370 crore Century Textiles & Industries is sorted out.

Confirming this, B K Birla told Business Standard: "I want to finalise everything."

The control of Century Textiles & Industries hinges on the control of the Birla group's investments arm "" Pilani Investments.

Pilani has a 36.39 per cent stake in Century Textiles, apart from a 4.69 per cent share in Grasim Industries, 2.45 per cent in Hindalco and shares in other Birla companies.

The source said B K Birla had made it clear to Kumar Mangalam Birla and Chandra Kant Birla that one of them would have to take control of Pilani Investments "as soon as possible".

Whoever takes control of Pilani Investments will have to buy out others and pay a premium over the market price of Pilani Investments because it will determine the control of Century Textiles, the jewel in the Birla group's crown.

B K Birla has a 30 per cent stake in Pilani Investments, the MP Birla group holds 25 per cent, the CK Birla group has a 25 per cent holding, 10 per cent with the public and S K Birla and others 10 per cent of the company's equity.

The octogenarian Birla has already decided the succession plan at Kesoram Industries and Manjushree Plantations (both will go to daughter Manjushree Khaitan), Jay Shree Tea and Industries (daughter Jayshree Mohta) and Century Enka (grandson Kumar Mangalam Birla).

B K Birla is following the principle advocated by Ghanshyam Das Birla for his companies "" control of a company should go to whoever monitors its functioning.

But Birla could not decide who to bequeath Mangalam Cement, Mangalam Timber and ECE Industries as none of his heirs is involved in the day-to-day working of them.

Mangalam Cement and Mangalam Timber were set up after the birth of his grandson Kumar Mangalam and were named after him.