The Hindu Business Line : Birla Corp not to appoint Chairman

THE Kolkata-based Birla Corporation Ltd, flagship company of the MP Birla group, has decided not to appoint any Chairman in the near future. A vacancy was created following the death of Priyamvada Birla, the widow of MP Birla, on July 3 this year.

The company is in the process of giving effect to this decision.

A formal notice has been sent to the shareholders informing them about it as a part of the general notice issued to them prior to the company's annual general meeting scheduled for September 15.

Mr K.C. Mittal, Managing Director of Birla Corporation, confirmed this development. He said that it was being placed as an ordinary resolution before the shareholders.

However, he refused to comment on why the decision had been taken or whether it would be repeated in the other MP Birla group companies.

"You have to ask the board of directors of Birla Corporation why they have taken this decision. They stated that they are not appointing a Chairman at present. And I cannot comment nor do I know whether it will be repeated in other companies."

Priyamvada Birla officiated as Chairperson of the Rs 1,200-crore Birla Corporation and the other group companies. Mr Rajendra Singh Lodha was the co-Chairman of Birla Corporation.

A similar decision is likely to be taken by the other MP Birla group companies like Universal Cables, Vindhya Telelinks and Birla Ericsson.

Business Line tried to contact Mr D.R. Bansal, Managing Director of Birla Ericsson and Chief Mentor and Manager of Universal Cables, but without any success.

Mr Narayan Jain, a city legal expert on corporate affairs, said: "If the Chairman of a company passes away, there is no timeframe for the appointment of a new Chairman."

According to him, the board of directors is the most important body of a public limited company.

"Why just the Chairman, even the appointment of a Managing Director is not that important if the board of directors is functional. In some companies, the Chairman is even a non-executive. So, there is no pressing need to appoint a Chairman under the laws," Mr Jain told Business Line.

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