Mindtree shares fell 14 percent intraday on July 8 as leaders in management resigned after Larsen & Toubro acquired a controlling stake in the company. The company's stock was quoting at Rs 778.65, down Rs 109.90, or 12.37 percent on the BSE at 10:52 hours IST.
After L&T gaining control of Mindtree, the IT firm's founders Krishnakumar Natarajan, Parthasarathy NS, and Rostow Ravanan have resigned from the board and executive roles, paving the way for the new promoter to make appointments. Chairman Natarajan, vice chairman Parthasarathy NS and chief executive Ravanan have quit the company, the firm said in a regulatory filing on July 5. The company said it will announce a new leadership team in due course.
"...at the board meeting held on July 5, 2019, Krishnakumar Natarajan (Executive Chairman), Parthasarathy NS (Executive Vice Chairman and Chief Operating Officer) and Rostow Ravanan (CEO and Managing Director) have submitted their resignations as members of the board of directors of Mindtree and as employees of the company," Mindtree said in a regulatory filing. It added that these officials will stay as board members till July 17, 2019 and as employees in line with their employment contracts to ensure smooth transition. Along with the other founders of the company, they have asked the company to de-classify them as promoters under applicable laws.
Mindtree had announced that L&T had acquired control of the company and had been categorised as a promoter with 60.06 per cent stake in the company. L&T held 9.87 crore equity shares in Mindtree as on July 2 following its recently-concluded open offer. The development brought the curtains down on months of hostile takeover drama at Mindtree - which was established in 1999 by 10 IT professionals. Since then, the company has grown to have well over 20,000 employees with annual revenue of USD 1 billion.
(Inputs from Agencies)