The only nominee of British American Tobacco (BAT) on the board of cigarettes-to-hotels major, ITC, Robert Earl Lerwill, has resigned.
Lerwill resigned more than a month back on medical grounds and BAT, the single largest shareholder in ITC, is in the process of finding a replacement.
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In response to a query from Business Standard, BAT said, “(We) can confirm that British American Tobacco is in the process of finding an appropriate candidate to replace Robert Lerwill on the board of ITC.”
ITC had informed the stock exchanges on June 23 that R E Lerwill, non-executive director, had resigned from the board of directors of the company with effect from June 22, 2016, on medical grounds. Lerwill had joined the ITC board as a representative of Tobacco Manufacturers (India) Limited, a subsidiary of BAT plc, the ultimate holding company, with effect from November 2013.
BAT used to have two nominees on the ITC board. Anthony Ruys, who had joined the board in January 2009, resigned in 2014-15.
BAT — a 30 per cent shareholder in ITC (as per BAT’s 2015 annual report) — appears to be in no hurry to put a nominee on the ITC board, a far cry from the scenario two decades back as mentioned by ITC chairman, Yogesh Chander Deveshwar, at the recent annual general meeting.
“A battle for control of the company had ensued amidst a public smear campaign. Doubts were raised even about the integrity of the organisation. A media trial, on the encouragement of the then representatives of our overseas shareholder, had already pronounced the Indian management inept, fraudulent and guilty,” Deveshwar told shareholders at his last annual general meeting in the joint capacity of chairman and chief executive officer.
The BAT-ITC spat dates back to 1994 when the British multinational wanted to wrest control of ITC by increasing stake to 51 per cent, but then ITC chairman Krishan Lal Chugh threw a spanner in the works. It escalated to a point where BAT demanded the resignation of Chugh and blocked ITC’s diversification into power in 1995.
BAT continued to oppose ITC’s diversification for a while longer. But over the years, the equations on both sides have changed under Deveshwar, a source close to the developments pointed out.
The net segment revenue of non-cigarette business has grown to Rs 23,000 crore since 1996 when Deveshwar was placed at the helm. And BAT too has benefited.
BAT’s share (30.06 per cent) of ITC was valued at 1136 million pounds in 2015 as opposed to 991 million pounds in 2014.
