The Hindu Business Line : New members on boards of Punjab Tractors, Swaraj Mazda

THE New Delhi-based Burman family, which recently purchased 11 per cent stake in Punjab Tractors Ltd (PTL), has appointed Mr P.D. Narang, Group Director at Dabur, as its nominee on the PTL board.

The boards of both PTL and Swaraj Mazda, in which PTL holds 14 per cent stake, have seen hectic activity over the past fortnight.

Mr Donald Peck, Managing Partner at Actis, who had resigned from the PTL board earlier, is back on the company's board replacing Mr Arun Duggal.

Mr Hardeep Singh and Mr D.L. Mirchandani have also joined the PTL board as independent directors.

In what could be perceived as a related development, private equity major Actis - which has about 29 per cent stake in PTL and 16-17 per cent in Swaraj Mazda - has appointed its nominee, Mr Steven Enderby, to the board of Swaraj Mazda.

Interestingly, Mr Peck is already the PTL nominee on the Swaraj Mazda board.

Further, both Mr Enderby and Mr Peck are also Actis nominees on the PTL board.

Market watchers said that in effect, this would imply that there are two Actis officials present on the boards of both the companies.

Analysts are watching the developments with interest; they said that it could be perceived as a sign of the private equity firm consolidating its position at the board level.

They also said that trouble has been brewing between Actis and the current management of Punjab Tractors after the latter decided to sell off part of its stake in Swaraj Mazda to Sumitomo Corporation last year.

Actis was not in favour of dilution of PTL's stake in Swaraj Mazda and had then indicated that it was not in the interest of shareholders.

According to industry sources, the standoff between Actis and the current Punjab Tractors management has only intensified in recent months.

Though no official confirmation was forthcoming, industry sources said that Actis may try to muster the board's support to bring about a change in PTL's top management.

Currently, LIC is the second largest shareholder in Punjab Tractors with 15 per cent stake, followed by the Burman family.

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