Elbee's management outsourcing plan flops

 Corporate India's first experiment with management outsourcing has come a cropper. Courier company Elbee Services' move to outsource management to Phoenix Resurgency Management has ended with Phoenix pulling out of the deal less than two months after taking charge.

 Elbee has now suspended operations nationwide and will resume services only after Diwali, its chairman and managing director Sandip Shah said.

 The induction of Phoenix into Elbee's management did not receive the approval of the company's financial partners. There were also differences on how future strategies were to be implemented, Shah said.

 A senior executive at Phoenix said, "We cannot divulge the exact details of our exit from Elbee as we got in with certain assumptions about some events, which did not take place, and that led to our moving out."

 Elbee is now looking at a strategic alliance with an international logistics company for infusion of funds. "We are in talks with a foreign player that does not have a presence in India. However, until the deal is finalised, we are not in a position to divulge the equity distribution," Shah, who holds around 40 per cent in Elbee, said.

 On dissolving the agreement with Phoenix, Shah said, "There were some differences on the turnaround strategy, and the agreement with Phoenix had to be dissolved since it did not receive approval in time."