Vijay may lose in Sheth feud II
It is not clear whether Vijay would continue at the helm as joint MD, or step down immediately.
By Anto T Joseph, TNN |
MUMBAI: Another family, some more rumblings: looks like the season of dispute is having an extended run in Corporate India. This time it’s the Sheth family. The simmering feud in the Sheth family, which owns 28% of India’s largest and oldest private shipping company, Great Eastern Shipping Company (GE Shipping), has taken a new twist. Two years back, the fight between the Sheths led to a vertical split in GE Shipping’s shipping and offshore businesses. Bharat Sheth and his brother Ravi Sheth took charge of GE Shipping, leaving his cousin Vijay Sheth to manage the demerged entity, Great Offshore (GOL). The tables, once again, seemed to have turned on Vijay.
As a first step in possibly depriving Vijay of his current responsibilities as MD of GOL, Bharat and Ravi are apparently bringing in a professional to run GOL as MD. A senior official at GOL told ET that the announcement is expected in the next couple of days. It is not clear whether Vijay would continue at the helm as joint MD, or step down immediately.
The decision might further strain the relationship between the Sheth cousins. The feud is said to have started nearly five to six years ago when Vijay first began to sense that his cousins, Bharat and Ravi, along with their father KM Sheth, had wrested control of GE Shipping and ended up marginalising him. In September 2005, the cousins finally announced a formal split. As part of the settlement, GE Shipping’s offshore division was to be demerged, with operational control in Vijay’s hands.
After the settlement kicked in, it isn’t clear when the cracks reopened once more. But sources say that GE Shipping’s decision sometime in the middle of 2006 to start a new offshore subsidiary, Greatship India (GIL), as a direct rival to GOL, may have heightened the differences. Ravi Sheth is the managing director of GIL.
If his cousins push through the changes at GOL, there is every chance that Vijay will put up a stiff resistance, given that he was responsible for building and nurturing GE Shipping’s offshore division for over a decade. But in a strange twist of fate, sources say he may have actually run out of options. That’s because the seeds of the current fracas lie in the somewhat peculiar nature of the demerger, where Bharat and Ravi ended up with a majority stake in both GE Shipping and GOL.
As a first step in possibly depriving Vijay of his current responsibilities as MD of GOL, Bharat and Ravi are apparently bringing in a professional to run GOL as MD. A senior official at GOL told ET that the announcement is expected in the next couple of days. It is not clear whether Vijay would continue at the helm as joint MD, or step down immediately.
The decision might further strain the relationship between the Sheth cousins. The feud is said to have started nearly five to six years ago when Vijay first began to sense that his cousins, Bharat and Ravi, along with their father KM Sheth, had wrested control of GE Shipping and ended up marginalising him. In September 2005, the cousins finally announced a formal split. As part of the settlement, GE Shipping’s offshore division was to be demerged, with operational control in Vijay’s hands.
After the settlement kicked in, it isn’t clear when the cracks reopened once more. But sources say that GE Shipping’s decision sometime in the middle of 2006 to start a new offshore subsidiary, Greatship India (GIL), as a direct rival to GOL, may have heightened the differences. Ravi Sheth is the managing director of GIL.
If his cousins push through the changes at GOL, there is every chance that Vijay will put up a stiff resistance, given that he was responsible for building and nurturing GE Shipping’s offshore division for over a decade. But in a strange twist of fate, sources say he may have actually run out of options. That’s because the seeds of the current fracas lie in the somewhat peculiar nature of the demerger, where Bharat and Ravi ended up with a majority stake in both GE Shipping and GOL.
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