Domestic financial institutions holding stakes in the M P Birla group companies appeared to be in favour of a smooth transfer of management to R S Lodha following the demise of group head Priyamvada Birla.
M P Birla group chairman Priyamvada Birla's demise on July 3 had led to the responsibility of the group being passed on to group co-chairman R S Lodha. The development was being opposed by the Birla family factions as Lodha was not a family member.
"We do not have any reservations against the management of M P Birla group companies being transferred under Priyamvada Birla's will as of now. We would keep a close tab on events that unfold but until then we would prefer to remain silent on the issue," R N Bharadwaj, managing director in charge of investment at Life Insurance Corporation of India told Business Standard.
"Internally we would examine the issue, the value of investment we hold in these companies as of now and after stakes are transferred. Our department would take a call if we find any detrimental development in these companies at a later sage," he added.
UTI and IDBI chairman M Damodaran said it was premature to comment on the issue but developments were being watched. "I am aware of the media reports", he said.
P B Ramanujam, managing director, General Insurance Corporation of India, also said that it was more of a family matter about transferring titles to an outsider but GIC as a matter of fact also did not have any reservations against Lodha as the designated successor to manage the affairs of the estate.
"He has been managing the companies and the stake transfer would not practically lead to any major management procedural changes. However, if there are any developments that would in our view would lead to fall in the value of our investments we would take a call," he explained.
Ramanujam, pointing out that Lodha was on the board of Tariff Advisory Committee and past president of Ficci, said, "We do not see any problem. Institutions have reservations only when the integrity of the new management is questionable. In this case it is not so," he added.
Institutions have large stakes in most of the companies. Their total holding in Birla Corporation is about 16 per cent. Of this, the Life Insurance Corporation has 6.5 per cent, while UTI has 6 per cent.
They hold another 15 per cent in Universal Cables. UTI, GIC and its subsidiaries hold close to 9 per cent in Vindhya Telelinks.
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