L&T to get 3 seats on Mindtree Board; Subroto Bagchi to step down

New Delhi: Construction major L&T, which is in the midst of a hostile takeover of Mindtree Ltd, has secured three board positions at the IT services firm, giving the former a firm control over the company where it is eyeing over 66 percent stake.

Also, Mindtree co-founder Subroto Bagchi, who will retire next month, has not offered himself for re-appointment to the Board.

In a BSE filing on Thursday, Mindtree said L&T CEO and MD S N Subrahmanyan will join its Board as Non-Executive Director with effect from July 16 when Mindtree is scheduled to hold its annual general meeting (AGM).

The Nomination and Remuneration Committee and the Board of Directors of Mindtree have also approved and recommended the appointments of Jayant Damodar Patil and Ramamurthi Shankar Raman as non-executive directors, subject to shareholders' approval at Mindtree's AGM, it added.

Patil is a whole-time director and Senior Executive Vice-President for L&T's Defence business, while Raman presently oversees the finance functions across the L&T Group. The committee has also approved the appointment of Prasanna Rangacharya and Deepa Gopalan Wadhwa as independent directors, the filing added.

"Subroto Bagchi, who retires by rotation at the 20th AGM on July 16, 2019, has not offered himself for re-appointment," it noted.

At the end of March 2019, Mindtree had eight members on its board, including co-founders Rostow Ravanan (CEO-MD), Krishnakumar Natarajan (Chairman) and NS Parthasarathy (Executive Director).

It has four independent directors on its Board - Apurva Purohit, Milind Sawarte, Akshaya Bhargava and Bijou Kurien.

Emails sent to the company seeking details of the restructured Board post the latest appointments did not elicit any response.

Interestingly, in March, Bagchi had resigned as the head of Odisha's Skill Development Authority and made a comeback to Mindtree.

In March, L&T had said it will buy 20.32 percent stake in Mindtree from V G Siddhartha and his coffee enterprise for over Rs 3,000 crore - marking India's first-ever hostile takeover bid in the IT space.

Since then, L&T has steadily increased its holding in the Bengaluru-based tech firm to about 30 percent. It is currently in the process of an open offer to buy an additional 31 percent stake. In all, the infrastructure major is eyeing about 66 percent stake in Mindtree for over Rs 10,700 crore.

The open offer - with an offer price of Rs 980 per share - opened on June 17 and is slated to close on June 28. If the offer is subscribed fully, the engineering behemoth will end up with a 66.32 percent holding in Mindtree.

Mindtree was also in the spotlight when its Board in mid-April proposed to pay a special dividend to shareholders, including promoters, that along with regular dividend and tax components would strip the mid-sized IT firm of about Rs 530 crore.

Mindtree's net profit grew 32.2 percent to Rs 754.1 crore in 2018-19, while revenue was up 28.5 percent to Rs 7,021.5 crore from the previous fiscal.