BENGALURU| MUMBAI: Cognizant Technology Solutions’ former senior executive Debashis Chatterjee is among the front-runners to become chief executive of Mindtree, a Bengaluru-based mid-tier IT services firm now majority owned by engineering conglomerate Larsen and Toubro, people familiar with the development said.
Chatterjee quit as president and head of global delivery at Cognizant in May. Rajeev Mehta, the former Cognizant president who joined L&T in April, is the other person in the running for the top job, sources said.
L&T did not respond to an email by ET, while Chatterjee declined to comment.
L&T said on Friday that it would announce a new leadership team for Mindtree after the software services firm’s chairman Krishnakumar Natarajan, vice-chairman NS Parthasarathy and CEO Rostow Ravanan, who are also cofounders, quit last week after they lost control of the company. They, however, remain shareholders.
Their exit has also raised concern among the second-rung leadership at Mindtree, who have asked L&T about their strategy for the company, a person who is aware of the conversations said.
The founders’ exit over the weekend has also not been well received by investors. The Mindtree stock closed down 10.43% after dropping 14% intra-day on Monday in a market that dropped 2%. “The overhang of residual shares is too high. Nalanda Capital still has 1.7% shares left after it tendered its holding in the open offer.
Arohi is left with a small shareholding, which they want to sell. The promoters’ shares are still unsold,” said Shriram Subramaniam, founder of proxy advisory firm InGovern.
Nalanda Capital, a long term investor in Mindtree with a 10.6% stake, had sided with its founders when they objected to the hostile takeover by L&T. It, however submitted its shares in the open offer after markets regulator, the Securities and Exchange Board of India (Sebi), questioned the Singapore-based public market fund on whether it was acting in concert with Mindtree founders without triggering an open offer.
L&T, which holds 60.06% in Mindtree, is unlikely to increase its holding following the government’s budget proposal to the market regulator to consider raising the current threshold of public shareholding to 35% from 25%.
Separately, L&T said Mindtree would be run as a separate entity and would not be merged with its own technology units. “Continuity will be the key theme in the management transition…
No position is sought to be disturbed at Mindtree, and no changes are contemplated right now. There will be a new CEO for Mindtree, the announcement about which will be done in due course,” L&T CEO SN Subrahmanyan was quoted as saying by news agency PTI.
Source: Economic Times