The battle for power within Kasturi and Sons, which runs the The Hindu daily, has once again moved to the courts. A group of 11 members from the family which comprises the shareholders has moved the Company Law Board (CLB) against the majority decision of the board of directors to remove N Ravi, editor, and Malini Parthasarathy from the editorial board.
According to sources, a petition was filed with CLB, not listed till this evening, on five grounds. One was that instead of formulating a succession plan, which had been directed by CLB in its order on December 22 last year, the board made a removal plan. On April 18, N Ram, editor-in-chief and publisher, with six other directors in the 12-member board, voted to appoint Siddharth Varadarajan (who heads the news bureau in Delhi) in place of Ravi. It was also decided, in accordance with the changed succession norms, that Ram would step down from his responsibilities, along with four others on the Board.
The measure meant the removal of Ravi, Nirmala Lakshman, K Venugopal and Malini Parthasarathy, all cousins, from their editorial roles.
In March 2010, Ram and eight others allegedly tried to curtail the powers of N Murali, the brother of Ram and the then managing director of The Hindu. CLB set aside the decision by the board to remove Murali’s powers.
Sources further said, the petitioners have asked CLB to declare the Board resolutions passed in April as improper, oppressive, motivated, unlawful, null and void and, consequently, set these aside. They have also asked the Board, according to the sources, to appoint a permanent independent chairman in place of Ram to conduct future Board meetings and the general body meeting.
The petitioners are N Ravi, Malini Parthasarathy, N Murali, Tara Murali (wife of Murali), M Krishna (son of Murali), Kanta Murali (daughter of Murali), Sudha Ravi, Aparna Ravi and Serendipity Investments Pvt Ltd, in which Ravi is a director.
The petition was filed against Kasturi & Sons, Ram, K Balaji (who was appointed managing director in March last year), K Venugopal (editor of The Hindu Business Line and a director on the Board), Lakshmi Srinath, Vijaya Arun, Akila Vijya Iyengar, Nirmala Lakshman, Nalini Krishnan and Siddharth Varadarajan.
BACKGROUND
In March last year, a dispute had surfaced among the Kasturi Ranga Iyengar family, which controls the group, around the appointment of K Balaji as managing director of Kasturi & Sons. Some of the family members opposed the redesignation of Murali as senior managing director. Though assigned an apparently higher position, he had been asked to limit his responsibilities to circulation and work on accounts and industrial relations with Balaji. In his earlier position, Murali had wide-ranging supervisory powers, cutting across departments. The decision was later reversed by the CLB judgment mentioned earlier, in December 2010.
Kasturi & Sons has 12 board members. Each of the four cousins, who together control the entire equity, has three members on the board. There are just under 50 shareholders, all members of the Kasturi Ranga Iyengar family. The cousins are G Narasimhan (father of N Ram, N Ravi and N Murali), S Parthasarathy (father of Malini Parthasarathy, Nirmala Lakshman and Nalini Krishnan), S Rangarajan (father of Ramesh Rangarajan, Vijaya Arun and Akila Iyengar), and G Kasturi (father of K Balaji, K Venugopal and Lakshmi Srinath). Members of the families of the four cousins — sons of Kasturi Srinivasan and Kasturi Gopalan (the second-generation owners) — own 25 per cent equity each.
