Manoj Kohli, CEO and joint managing director of Bharti Airtel, sold his entire stake in the company for Rs 7.24 crore for “personal reasons”, a move that saw the stock tank 6.3 per cent, becoming the top loser on the Bombay Stock Exchange on a day the becnhmark Sensex rose 2.25 per cent, on speculation that he was leaving the company.
Kohli’s stake sale was followed this evening by a crucial restructuring in the organisation, with Sanjay Kapoor, president (mobile services), being appointed deputy CEO to oversee the mobile, DTH and telemedia business. He will continue to report to Kohli.
Kohli, who was running the mobile business, DTH and telemedia business, will now focus more on strategy development, governance and organisation development. “He will lead the overall transformation programme, including the creation of factories and shared services, with the objective of building the right capabilities to enable the company to succeed in the next phase of its growth. He will also provide additional focus on building the B2B powerhouse,” a press release said.
Kohli’s shareholding accounted for a 0.006 per cent stake in Bharti Airtel. The sale was conducted through open market transactions. According to a statement at the National Stock Exchange (NSE), Kohli sold 123,000 shares in two transactions at the exchange during the month.
On 6 March, Kohli sold 53,000 shares for Rs 3.13 crore. In another transaction on March 9, 2009 Kohli sold the remaining 70,000 shares for Rs 4.11 crore.
Kohli said he continued to hold 1,80,000 stock options in the company, some of which have already vested and the balance will vest on the basis of the vesting schedule.
Asked why he sold the shares at a time when the price was low Kohli added that “one sells shares for personal requirements and the sale cannot be timed to the market”.
Dismissing doubts of his exit from the company, Kohli said, “I am happy to confirm that I continue as CEO and joint managing director of the company. I have had a very gratifying time in the company and will continue to work here to make it a global company. I am really amused at the speculation.”
Analysts said markets have over-reacted to the news. Harit Shah, telecom analyst at Angel Broking says, “This stake sale does not mean anything, he still holds 1,80,000 options. This issue has been overplayed, which is possibly why the stocks also took a hit today.”
Analysts also say that the stock could also be reacting to the slash in termination charges by the telecom regulator on 10 March.
Bharti Airtel is likely to take a hit following the cut in domestic termination charges since it is a net collector of termination fees while the other operators are net payers.
Other listed telecom stocks like Idea Cellular and MTNL also fell, by smaller margins (0.25 per cent and 0.11 per cent) on the BSE but Tata Telecom and Reliance Communications.
Competitors, however, said it is an unusual move by the CEO of a company.
“If we wanted money for a house or something he could have easily pledged the shares to the promoter and received the money. By selling his shares he has created confusion about his place in the company,” said a senior executive of a leading telecom company.
