Financial services major Shriram Group’s founder, R Thyagarajan, on Tuesday came out with a succession plan through the trust route by appointing a board of management to run the Shriram Ownership Trust (SOT). The Group's promotership has been transferred to the Trust and doesn’t lie with any individual or family, he said.
The four-member board of management – D V Ravi, managing director (MD) of Shriram Capital; Umesh Revankar, MD of Shriram Transport Finance; Jasmit Gujral, MD of Shriram General Insurance; and R Duruvasan, former MD of Shriram City Union Finance – will run the group’s business, and Thyagarajan will act as a mentor to the new board.
According to reports, SOT owns close to 30 per cent in the Group's holding company, Shriram Capital.
“One individual cannot manage a large group like ours. It requires a set of individuals with varied skills who can collaborate to drive the group's vision and strategy. In line with my conviction, a leadership team that will oversee the SOT’s interest as the promoter of Shriram Group
has been constituted,” Thyagarajan said.
The company wants to treat the new board as a team of equals and hence a chairman was not appointed, reports said. The transition arrangement and restructuring will be in place in the coming months.
Thyagarajan said that though there were apprehensions about the succession plan, the Group was clear that the promoters’ stake would be owned by its current and future leaders.
The Group had formed SOT with a long-term view of a succession plan way back in 2006 as a private discretionary Trust. “This set of individuals, with varied skills, will collaborate to drive the group's vision and strategy. The board of SOT constantly evaluates the performance of its leadership team. It keeps inducting additional members into the Trust to ensure the perpetuity of ownership and leadership to manage Shriram Group,” he added.
The board of management will be responsible for defining the long-term strategy of individual entities and the group, and overseeing its execution. The board members will manage essential areas that impact the group across entities and may not necessarily be aligned to one particular entity. "They will collaborate among themselves in a manner that will derive the optimum benefit to the group," Thyagarajan said.
The board will also strategically help all operating entities to collaborate and strengthen the Group's customer relationship model. "In close collaboration with our partners in Shriram Capital – Sanlam, PEL, and TPG, the board of management will oversee the Group's growth and strategy in the next phase," he said.
"We are excited to take up the responsibility of the board of management at the Group. Our operating companies
across lending and insurance businesses have grown in size and scale, and continue to have immense potential and capabilities. All of these are led by an able management team and a professional board. Our role would be to extend strategic vision to them,” said D V Ravi of Shriram Capital.
This comes amid reports that the Group is planning to restructure its business through which Shriram Capital will undergo an amalgamation with Shriram Transport Finance Co and Shriram City Union Finance.
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