Kolkata: ITC Ltd’s Y.C. Deveshwar, 64, will seek a five-year extension as chairman and executive director at the company’s 100th annual general meeting next month, but may serve a part of his extended term as non-executive chairman, handing over the company’s diverse businesses to a successor.
The consumer goods maker, one of India’s biggest professionally managed companies with no clear promoter group, made this announcement in a notice to shareholders for its AGM, which will be held in Kolkata on 29 July.
Deveshwar’s current term will end in February 2012. An extended term will make him one of the longest-serving chairpersons in any professionally managed company in India.
An ITC spokesperson confirmed the AGM notice, but refused to give details of the succession plan.
ITC has traditionally promoted executive directors to the chairman’s post. It has three other executive directors in its 16-member board.
These executive directors are Kurush N. Grant, 53, Nakul Anand, 54, and Pradeep Dhobale, 55. All of them have worked with ITC for more than three decades.
Though Grant is the youngest among the executive directors, a large section of ITC employees expect him to take over from Deveshwar, as he has been the chief executive of the company’s consumer goods business, including its most profitable cigarette division.
Grant was appointed executive director in March last year—the first new executive director appointed by ITC in nine years.
The appointment of Dhobale and Anand as executive directors followed: they joined ITC’s board on 3 January this year. Dhobale and Anand were earlier members of ITC’s corporate management committee—the company’s highest decision making body—and were chief executives of its paper and hotel businesses, respectively.
Deveshwar, who joined ITC in 1968, became a director of the company in 1984 and its chief executive and chairman on 1 January 1996. Between 1991 and 1994, he worked with national carrier Air India as chairman and managing director. He is also a director on the board of HT Media Ltd, which publishes Mint.
In the past two-and-a-half years, three executive directors have retired from ITC, starting with S.S.H. Rehman, who left the company in 2008-09. In 2010, Anup Singh and K. Vaidyanath retired in the space of six months. All of them had crossed 60.
Though there is no specified retirement age for ITC’s executive directors—they are appointed by shareholders for three-five year terms—the retirement of Singh and Vaidyanath in close succession led to speculation over whether Deveshwar would seek to continue after his term ended in 2012.
“This was pretty much expected,” said a former ITC employee, commenting on Deveshwar’s decision to seek reappointment as chairman for five more years. He spoke on condition of anonymity.
“It takes time to hand over reins of a company as big as ITC,” this person said. “That apart, there was no compulsion for Deveshwar to retire immediately. Under him the company has performed very well.”