Soon after Larsen & Toubro acquired a controlling stake in Bengaluru-based IT services company Mindtree, Executive Chairman Krishnakumar Natarajan, Executive Vice Chairman and Chief Operating Officer N S Parthasarathy and CEO and Managing Director Rostow Ravanan, who were part of Mindtree’s leadership team, tendered their resignations as members of the Board of Directors and employees of Mindtree on Friday.
In a filing to the stock exchanges, Mindtree said, “They will stay as Board members till 17 July 2019 and as employees in line with their employment contracts to ensure smooth transition Further, along with the other founders of the company, they have asked the company to de-classify them as promoters under applicable laws.”
The company said that it will announce a new leadership team in due course.
According to the Times of India, Rostow Ravanan was asked to step down by L&T.
L&T officially acquired a controlling stake in Mindtree with 60.6% as on Monday, and is now categorised as the promoter of the company. This is the first hostile takeover in the Indian IT industry. Co-founder Subroto Bagchi exited the company on June 20. Five new directors were appointed by Mindtree to the company’s board.
"Larsen and Toubro Limited (L&T) has acquired equity shares to an extent 60.06% of the total shareholding of the company and has acquired control and is categorised as promoter pursuant to SEBI (issue of Capital and Disclosure Requirements) Regulations, 2018," Mindtree said in a filing to the Bombay Stock Exchange on Wednesday.
L&T was holding 9,87,79,179 equity shares in Mindtree as of July 2, 2019.
L&T first began the process of acquiring Mindtree in March when it bought 20.32% stake in Mindtree from VG Siddhartha, founder of Café Coffee Day and two of his companies.
Over the next two months, it bought 8.58% stake from other shareholders, which further increased its ownership to 28.9%, after which the open offer started on June 17.
In March, Mindtree’s co-founders Rostow Ravanan, Subroto Bagchi and Krishnakumar Natarajan strongly opposed the hostile takeover, saying that it made no strategic sense. Together, they held 13.32% in the company.