Usha Martin’s Prashant Jhawar resigns as non-executive director

Prashant Jhawar, non-executive director of Usha Martin Ltd (UML), has tendered his resignation from the company’s board with immediate effect citing “mismanagement of the company and apathy of the board”.

In a notification to stock exchanges on Saturday, Usha Martin said, “Accordingly, Mr Prashant Jhawar ceases to be a director of the company.”

In his letter to the board of directors of UML, Prashant Jhawar said that the extent of mismanagement of the company and the apparent apathy of the board was alarming, including shielding the illegal acts of the Managing Director Rajeev Jhawar.

“I have been raising red flags for a while now, and all of my warnings have fallen on deaf ears. Though I am a non-executive director in the company and am not taking active part in the decision making from the time I have shifted to London, but I cannot be an accomplice to illegal acts and in this hostile environment, I find myself unable to continue as the non-executive director of the company,” Prashant Jhawar said in his letter.

Citing some of the “illegal acts” which have been causing wrongful loss to the company, he said there has been siphoning of funds by Rajeev Jhawar through Natcom, which is allegedly a shell company registered in Singapore. The company had no track record in shipping but was used to route contracts of nearly $17 million and leakage of nearly $5 million.

However, Rajeev Jhawar, Managing Director, UML, said that Prashant’s term was ending on September 21 and he was to go in for reappointment at the annual general meeting on September 21.

“Before that he has put in his resignation. He has been citing all these reasons in the past also, there is nothing new in what he is talking about,” he said.

The two promoter factions — Basant-Prashant Jhawar and Brij-Rajeev Jhawar — have been locked in a bitter fight. Basant and Prashant Jhawar also moved NCLT (National Company Law Tribunal) against “wrongful acts of mismanagement and oppression in the company”. The case is pending before NCLT, Kolkata.

Prashant Jhawar, in his letter, also raised concerns about the Provisional Attachment Order of the Enforcement Directorate, which had provisionally attached certain immovable properties of the wire and rope plant situated at Ranchi valued at approximately ₹190 crore. However, Rajeev Jhawar said that the provisional attachment order was a part of an ongoing litigation. “We have informed the stock exchanges. It is a legal process and we are confident that our case is strong and we will fight it out.”

The order passed against the company is in connection with the sale of iron ore extracted from the mines in Ghatkuri, West Singhbhum and Jharkhand, allotted for captive use. The ED order would not affect the Tata deal, Rajeev Jhawar said.

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