The Hindu Business Line : Sanmar group constitutes corporate board

THE Chennai-based Sanmar group on Thursday announced that it has constituted a corporate board that will be responsible for the overall management of the group and also that the members of the group's owner family have stepped off the boards of all the operating companies.

This move is in line with the group's decision to separate ownership from the operational management of its businesses, according to a group press release.

This is similar to what the Murugappa group did in November 1999 when it formed a Murugappa Corporate Board with members of the promoter family and three independent directors. The various businesses in the group were entrusted to professional chief executives from outside the family.

The Sanmar Group Corporate Board will have two sets of directors - internal directors who will include members of the owner family and managing directors of a couple of the group companies, and external directors. The group intends to strengthen the board by inducting a couple of industry specialists.

As part of the move, members of the owner family - Mr N. Sankar, now Chairman of the group, Mr N. Kumar, Vice-Chairman, and Mr Vijay Sankar, a director and son of Mr Sankar - have stepped off the boards of all operational companies.

Apart from these three, the internal directors on the corporate board will be Mr M.N. Radhakrishnan, Managing Director - Sanmar Engineering Corporation Ltd, and Mr P.S. Jayaraman, Managing Director - Chemplast Sanmar Ltd.

The external directors on the corporate board are: Mr V. Narayanan, former chairman and managing director, Ponds (India) Ltd; Mr Adit Jain, Managing Director, IMA India; Ms Preety Kumar, Managing Director, Amrop International India; Mr Pradip Kapadia, Advocate, Gagrat & Co; and Mr Ashok Wadhwa, Managing Director, Ambit Corporate Finance.

The board of directors of Chemplast Sanmar has also been reconstituted. In a communication to the National Stock Exchange, the company said that Mr N. Sankar, Mr V. Narayanan, Mr N. Kumar, Mr Adit Jain, Mr P.N. Kapadia, Mr Vijay Sankar and Mr N. Srinivasan, all directors, had resigned from the board. The company said it was co-opting Mr V.K. Parthasarathy, an expert on finance, and Mr V.V. Subramanian, head of treasury at the Sanmar group, to the board.

When contacted, Mr Sankar said, "We treat all our operating companies equally. So far there was an external board only for Chemplast Sanmar." The group felt that it needed external guidance for all the companies even though, except Chemplast Sanmar, they were not publicly listed.

The group corporate board, though not a statutory board, would have the character of one including audit committees, he said.

The press release said that the Sanmar Corporate Board is being empowered to oversee the activities of all the constituents of the group in terms of their performance policies, plans and strategies, and also to ensure adherence to the highest standards of corporate governance and ethical conduct.

The audit committee of the corporate board will be chaired by Mr V. Narayanan. The corporate board is expected to meet at least four times a year.

It may be recalled that in August 2000, the Sanmar group took the first step towards separating ownership of the group from the operational management when it appointed managing directors for each of its four established corporations and another as managing director - corporate of the group.

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