L&T praises Mindtree founders; backs dividend payout

Our Bureau Bengaluru | Updated on August 23, 2019 Published on July 16, 2019

At the latter’s AGM, L&T chief Subrahmanyan vows to protect Mindtree’s independence

Addressing Mindtree shareholders at the company’s 20th annual general meeting (AGM) on Tuesday, SN Subrahmanyan, the CEO and MD of Larsen & Toubro, the new owner of the IT major, complimented the founders of the company for creating a billion-dollar business.

L&T acquired 60.06 per cent in Mindtree after mounting a hostile bid, following which the top brass of the latter, including Chairman Krishnakumar Natarajan and CEO Rostov Ravanan, submitted their resignations.

“Mindtree has substantially overtaken peers founded in the 80s and 90s to stand out among mid-tier IT firms as exceptional on business positioning, perception and maintaining impeccable governance standards and reputation across all stakeholders,” Subrahmanyan said in his maiden address to the shareholders.

Mindtree, as the latest entrant to the L&T family of firms, will continue to have an independent management, unique culture and committed ‘Mindtree minds’, he said.

Subrahmanyan had earlier sought permission from the outgoing Mindtree Chairman Natarajan to address the shareholders at the company’s AGM, as the appointment of three L&T executives to the Mindtree board will come into effect after the shareholders’ vote.

Hefty payout

The L&T CEO also said that his company supported the Mindtree board’s earlier decision to pay a sizeable dividend of ₹27 per share to the shareholders.

L&T had earlier opposed the payout, stating that it would deplete Mindtree’s reserve of ₹1,050 crore by half.

The hefty 200 per cent dividend had been announced to mark the 20th anniversary of the company. He said L&T had not yet taken a decision on appointing a new management for Mindtree.

Enabling business

“While L&T does not have any concentrated ownership, in spirit, every employee is an owner. Being a professionally run organisation, any employee, like in my case, can dream to become the CEO one day. Growth in L&T is purely on the basis of performance. Meritocracy drives decision making within the L&T group,” he said.

“The top management of L&T has a direct connect with most C-suites of clients, and thereby brings in warmth and goodwill, all of which becomes an enabler for the business. L&T plans to leverage its 360-degree relationship with clients for accelerated growth of Mindtree.”

Subrahamanyam assured the shareholders that the management will be focussed on doing everything possible to keep the services being rendered to various clients at its best.

“We will strive to provide new-age technologies, services, digital and content in an evermore increasing manner to take the organisation forward,” he said.

Responding to shareholder queries, he said, “Mindtree won’t be snatched away, and in fact, it is now part of a bigger tree called L&T.”

‘No plans to de-list’

A shareholder said that L&T should have tried to persuade the founders to remain with the company, but Subrahmanyam reasoned that their decision to resign from the board had been a personal one.

Answering another question, he said that there were no plans to de-list Mindtree and its head office would continue to be in Bengaluru.

Subrahmanyan also informed the shareholders that L&T has successfully completed the acquisition of Mindtree, as per the public announcement it had made in March this year.

“It made strategic sense to acquire Mindtree, as we were further looking for growth opportunities in the services segment,” he said.

Published on July 16, 2019
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