More of same at L&T: Naik stays till 2017

The feisty A M Naik is not relinquishing the reins of Larsen and Toubro (L&T) anytime soon.

In a ‘top-management rejig,’ the engineering and construction conglomerate on Friday announced that its board of directors has decided to split the roles of chairman and managing director, effective April 1.

Naik, who has been the chairman and managing director since December 2003, will now become the executive chairman, the company announced.

K Venkataramanan, whole-time director and president (hydrocarbons), will take over as the managing director and chief executive officer, running the day-to-day operations. Venkataramanan had joined L&T as a graduate engineer trainee in 1969 and was elevated to the L&T board in 1995.

The board also approved the elevation of Shailendra Roy as a wholetime director with immediate effect. Roy is currently the senior vice-president, power development business, corporate affairs & corporate initiatives, and is also a member of the executive management committee of the company.

The succession planning exercise was eagerly awaited, with the 70-year-old Naik due for retirement in September this year.  The board decision gives him five more years at the helm — till 2017.

“I have seen the company grow from Rs6,000 crore to Rs60,000 crore, but now I will work in more of an advisory role and groom mid-level executives,” said Naik.

The rejig comes at a time when the economy is in the throes of a lowdown and L&T is facing stiff competition for new orders in most of its business verticals. It has, in fact, lowered its order book guidance for this fiscal.

“It is interesting that the company has chosen an insider, who is also one of the longest standing board members. This indicates the company has gone for continuity and stability at a time when its mammoth restructuring exercise is underway,” said an analyst at a domestic brokerage firm, requesting anonymity.

The company’s restructuring exercise, branded ‘LAKSHYA’, is aimed at simplifying its portfolio and creating 10 independent companies and seven subsidiaries in an effort to bring focus, autonomy and accountability.