Essel and ITC see internal reshuffle

The USD 3bn Essel Group's Subhash Chandra has undertaken a board-level re-organisation of the entertainment-to-education major. In the past fortnight, key executives of Essel Group’s three listed firms — Zee Media Corporation, Zee Entertainment Enterprises and Dish TV — have stepped down to hand over the reins to members of the family.

02 Nov 2015 | By Samir Lukka

Meanwhile another cigarettes-to-hotel, packaging major, ITC Ltd has also initiated significant board-level changes, fuelling speculation about its succession plans. For starts this means, the retirement of Pradeep Dhobale on 6 December.
 
In 2010-2011, Pradeep Dhobale was inducted into the ITC board. Dhobale was the head of paperboards, paper, packaging, finance and information technology, and Anand was entrusted with hospitality, travel, and tourism at the strategy level. Towards the end of 2014, Dhobale's role was a focus on the FMCG business.
 
The ITC board has approved the appointment of Sanjiv Puri, currently president, fast-moving consumer goods (FMCG), with effect from December 6, and Rajiv Tandon, chief financial officer, as additional whole-time directors, subject to the approval of members with effect from 22 January, 2016.
 
In the latest quarter results, which ITC declared, the net profit remains flat due to a FMCG slowdown; plus a weak revenue growth in agri-business, hotels and paper business which has affected the bottomline.
 
The FMCG others business (packaged foods, dairy products, apparel, stationery etc) has shown a 7% growth during the quarter at Rs 2,351.6 crore with EBIT loss of Rs 11.10 crore against loss Rs 10.31 crore on a yearly basis. The overall profit rose to Rs 2,431 crore from Rs 2,425 crore in year-ago period, impacted by slow revenue growth in cigarette business.
 
According to a SEBI report about the Essel Group, "The trend has been visible for a while, with Chandra, 64, stepping down from the board of companies managed by his brothers to ensure they take complete charge. For instance, in December 2014, Chandra, his immediate family members and the entities controlled by them were no longer part of the promoter group of Essel Propack, the group's packaging arm, as part of a modified family arrangement."
 
Today, Ashok Goel is vice-chairman and managing director of Essel Propack and oversees the packaging and amusement parks business.
 
Goel said, Essel Propack is hoping to maintain a 20% FY16 PAT. The company undertook a strategic divestment during the quarter under review. He said, "The net profit has risen 54% at Rs 59.3 crore versus Rs 38.5 crore. The company undertook a strategic divestment during the quarter under review and the proceeds from the sale were used for debt repayment, which in turn helped in reducing financing cost."