Sibling spat intensifies at Man Industries

In a quiet boardroom manoeuvre on Thursday, the powers of the vice-chairman and managing director Jagdish Chandra Mansukhani of Man Industries (India) Ltd were withdrawn by a board led by his elder brother and chairman Ramesh Chandra Mansukhani.

The move came even as ‘JC’ and ‘RC’ took their differences to a new level.

The younger sibling, JC, on May 13 filed a criminal complaint at the Santa Cruz police station in Mumbai, alleging financial misappropriation and diversion of `43 crore from Man Industries to a Dubai account.

The board meeting was called at a short notice of about 16 hours and that too without an agenda, JC claims.

He said he decided to stay away from the meeting as his queries were rebuffed and later in the evening he found that his powers to function as a vice-chairman and managing director were also withdrawn by the board.

“The board has withdrawn with immediate effect the powers of management exercisable by J C Mansukhani as the managing director of the company,” Man Industries informed the Bombay Stock Exchange.

“There might have been irregularities and that’s the reason why the board has taken this decision,” a company spokesperson told DNA Money.

He declined to elaborate, saying only RC could do that.

The brothers have in the past tried to reach an understanding through mediators to either buy or sell their respective stakes in favour of one another.

Even a valuation was apparently reached but talks floundered because RC changed his mind midway, JC claimed.

The mediators were Ramesh Baheti, chairman, Steel Tubes of India, and Ashok Maheshwarri, chairman of D&H Secheron Industries.

In his complaint to the cops on May 13, a copy of which was reviewed by DNA, JC said, “On May 4, 2011, an amount of Rs20 crore has been transferred from Man Industries (India) Ltd to its subsidiary Man Overseas Metals DMCC. This transfer has been done by my brother at his behest.”

The complaint also alluded that there was “no justification” for the transfer of funds except to use company funds to repay the chairman’s son’s loan obtained from ICICI bank amounting to Rs100 crore.

The code of conduct authorises the chairman to advance only `5 crore per transaction, JC’s complaint added.

The board had not given any approval to transfer Rs20 crore, the complaint said.

In another transaction, Rs23.27 crore was transferred to JKN International FZC as commission paid for Kish Projects (Nerro Gustar), Iran.

According to JC, there was no question as Man Industries has only one exclusive agent in Iran by the name of Asia Aran International Engineering Company.

It was a “criminal act,” JC told DNA, in an interaction, a day after the board meeting approved the resolution to withdraw his powers.

According to him, most of the six board members are ranged against him as they are close to RC.
The brothers are co-promoters of the Rs1800 crore Man Industries Ltd, manufacturer of pipes, and caters to the oil and gas sector and public sector corporations.

The company is profitable and the Man group has been around for 32 years and traces its origins to Indore.

JC was responsible for setting up the plant and responsible for production and marketing, while RC was in charge of corporate affairs.

“Charges and counter charges have been made by both parties,” a source close to one of the brothers said. The courts will finally have to step in, he added.

“An application for operation as a minority shareholder and mismanagement against his elder brother has been made before the company law board,” says Vyapak Desai, a counsel for younger sibling.

According to RC, the board decided to withdraw the powers enjoyed by JC due to several acts committed by him which went against the company.

The decision was approved by the board and not a single rupee has been misappropriated by the company, he said.

On the criminal complaint, RC, who also has a legal background, said the complaint was a “civil matter” and not a “criminal case,” and therefore will be pursued in the courts.

According to RC, another issue that troubled the board was JC’s efforts to communicate to banks and paint a wrong picture of the company.

On the ownership issues, RC admitted that indeed discussions have been underway for two years. “My best wishes are always with him,” he said.
But JC has decided to take the battle the full distance. “I’ve more in store. There is no way we can work together now,” he says.