Mahindra & Mahindra, Ford Motor joint venture gets approval from CCI

The Competition Commission has approved Mahindra& Mahindra's acquisition of majority stake in a wholly-owned subsidiary of Ford Motor Co, which will create a joint venture in the country.
In October last year, M&M said it would buy 51 per cent stake in Ardour Automotive Pvt Ltd for around Rs 657 crore.

In a tweet on Monday, the Competition Commission of India (CCI) said it has approved "formation of JV between Mahindra & Mahindra and Ford Motor and transfer of automotive business of Ford India to the JV".
The remaining stake of 49 per cent in Ardour Automotive would be held by Ford Motor Co and/ or any of its affiliates.
The new venture would acquire the automotive business of Ford India Pvt Ltd (FIPL), a wholly-owned subsidiary of Ford Motor Co.
The automotive business includes vehicle manufacturing plants of Ford India in Chennai and Sanand.

Anand Mahindra to assume non-executive chairman role in M&M succession plan

Mahindra& Mahindra (M&M), the Indian automobile major with interests in defence manufacturing, energy, and farm equipment, is revamping its senior management structure as part of a succession plan in which Anand Mahindra will transition to the role of non-executive chairman, effective April 1, 2020. Currently, he is executive chairman of the group.
Pawan Kumar Goenka, who has been reappointed managing director at M&M, will have an additional responsibility as chief executive officer (CEO) for a year, effective April 1, 2020. In an announcement on Friday, the company said M&M’s governance, nomination and remuneration committee (GNRC) undertook a board and senior management restructuring exercise. It has created the CEO position as it aims to implement its plans around electric mobility and capitalise on the synergies with Ford’s India operations in the near future.

The statement said, Anish Shah, group president (strategy) at M&M, will replace Goenka, who will retire once his term ends on April 1, 2021.
Shah, who also takes over the role of CFO from April 1, 2020, for a year, replacing V S Parthasarathy, will be appointed MD and CEO at M&M for four years beginning April 2021. His term will end in March 31, 2025.
"Mahindra will serve as a mentor and sounding board for the managing director on issues to be presented to the board, especially in the areas of strategic planning, risk mitigation and external interface. In addition, he will be available to provide feedback and counsel to the managing director on key issues facing the enterprise,” said the release.
On April 1, 2020, Rajesh Jejurikar will join the M&M board as executive director (auto and farm sectors), with direct operational responsibility and accountability for the sectors. He will report to Goenka for the transition year, and then to Shah.
C P Gurnani, MD and CEO of Tech Mahindra, will join the M&M board as non-executive director. Rajeev Dubey, group president (HR & corporate services) and CEO (after-market sector), will retire in April 2020 on reaching the age of superannuation and will continue to be associated with the group in a non-executive and advisory capacity.
V S Parthasarathy will head the mobility services sector, a new vertical being created by combining the after-market sector, Mahindra Logistics, and auto mobility services.
“This plan reflects M&M's depth of management talent and will ensure continuity in terms of culture, values, governance, and operational effectiveness. In my new role, I see myself as the conscience keeper of the Mahindra group, as the custodian of its values, and the watchdog of the interests of its shareholders. Internal audit will continue to report to me. I will continue to exercise oversight through the board,” said Anand Mahindra.
Speaking on behalf of the governance, nomination and remuneration committee of the M&M board, M M Murugappan, the panel’s chairman, said: “The GNRC interviewed internal candidates and also considered the prospect of external candidates. This thorough and rigorous process reflects the highest standards of corporate governance. We are confident the new leadership team is well equipped to perpetuate the Mahindra Rise culture.”
There are more changes on the anvil, both at the group corporate office and at the auto and farm sectors, the company said.

M&M announces board rejig, Anand Mahindra to be non-executive chairman

Mahindra& Mahindra (M&M) on Friday announced a rejig of its top management with Anand Mahindra, 64, transitioning to the role of non-executive chairman from executive chairman, effective 1 April, 2020.
In a statement, the firm said Pawan Kumar Goenka has been re-appointed the managing director with additional responsibilities of chief executive officer (CEO) for a year, effective 1 April, 2020.

The company has created the CEO position as it aims to implement its plans around electric mobility and capitalise on the synergies with Ford's India operations in the near future.
Further, Anish Shah will transition to become Managing Director and CEO on April 2, 2021, replacing Goenka, who will retire after his term ends.
Shah will join M&M board as Deputy Managing Director and Group CFO, replacing VS Parthasarathy, the current CFO.
Parthasarathy will head the mobility services sector, which is a new sector being created by combining the after-market sector, Mahindra Logistics and Auto Mobility Services.

Tech Mahindra Q2 profit rises 5.6% to Rs 1,124 crore; to acquire Born Group

IT firm Tech Mahindra on Tuesday posted 5.6 per cent increase in consolidated net profit at Rs 1,124 crore for the September quarter, and said it will acquire US-based Born Group at an enterprise value of USD 95 million (approximately Rs 671 crore).
The Mumbai-based company had registered a net profit of Rs 1,064.3 crore in the July-September 2018 quarter, Tech Mahindra said in a statement.

Its revenue from operations grew 5.1 per cent to Rs 9,070 crore in the quarter under review from Rs 8,629.8 crore in the year-ago period, it added.
In dollar terms, the company's profit was at USD 158.6 million, while revenue was USD 1.28 billion in the September 2019 quarter.
"We are thankful to our customers for believing in our capabilities despite a tough demand environment. Our consistent large deal wine is a testimony of our differentiation in the marketplace," Tech Mahindra Managing Director and CEO CP Gurnani said.
He added that the company is confident of its growth outlook for both communications and enterprise businesses.
"Digital continues to be a strong growth driver as we help our customers in their transformation journey," he said.
Tech Mahindra Chief Financial Officer Manoj Bhat said the company have witnessed a broad-based growth across geographies and customers.
"We continue to focus on margin improvement, while transitioning some of the large deals in a volatile macro economic environment," he added.
During the quarter, the company signed a multi-year agreement with AT&T to expand strategic collaboration accelerating the latter's IT network transformation, shared services modernisation and movement to the cloud.
Tech Mahindra said its board has approved the proposal to acquire 100 per cent stake in Born Group Pte Ltd, directly and indirectly through its wholly owned subsidiary - Tech Mahindra (Singapore) Pte Ltd.
"The enterprise value is USD 95 million. USD 25 million will be paid out linked to achievement of financial targets for the financial year ending December 31, 2019," it said.
The cash transaction is expected to close by November 15, 2019.
Headquartered in New York City, Born Group is the largest independent, integrated agency for strategy, creative content and commerce offerings with strong technology capabilities. It has offices in London, Singapore, Hong Kong and India, and has over 1,100 employees.
"The acquisition will enhance Tech Mahindra's transformation consulting capabilities through addition of creative and design skills, technology and analytics platforms and commerce expertise," it said.
Tech Mahindra will acquire the Indian subsidiary of Born Group - Born Commerce Pvt Ltd. Tech Mahindra (Singapore) Pte Ltd will acquire all the other legal entities of Born Group, it added.
The entity was incorporated in 2014. Its turnover was USD 50 million in 2018.

M&M lays off 1,500 temporary workers, seeks govt stimulus for industry

Indian auto major Mahindra & Mahindra has made a case for a fiscal stimulus package from the government for the automobile sector to tide over an unprecedented slump in sales and arrest job losses.
The company's Managing Director Pawan Goenka told reporters here that the auto maker has retrenched about 1,500 temporary workers since April 1 this year, adding that if the slowdown continues it will be forced to lay off more employees.

However, he emphasised that the concern on job losses will come more from automotive suppliers and dealers and not as much from original equipment manufacturers.
“I think from April 1 till now we have removed about 1,500 (temporary workforce)... We are trying not to remove more but if the slowdown continues we will probably be forced to remove,” the Mahindra & Mahindra MD said.
Goenka was speaking on the sidelines of the opening of Mahindra & Mahindra's first completely knocked down automotive assembly unit here in a joint venture collaboration with Ideal Motors of Sri Lanka.
Christened as Mahindra Ideal Lanka Pvt. Ltd. the local assembly plant located in Welipenna near Colombo on Saturday also rolled out its first product, the compact SUV, KUV100 petrol K6+ variant to start off with, followed by other variants in the near future.
The local assembly cum manufacturing operations will lead to significant tax savings for Mahindra Ideal Lanka, which is hoping to price the KUV100 below 3.2 million Sri Lankan Rupee (INR 12.85 lakh).
“This is our first effort to sell passenger vehicles in Sri Lanka and I hope with this effort we will get to a market share similar to or even larger than what we have in India,” Goenka said.
He observed that achieving a turnaround was crucial for India's automotive industry during the ongoing festive season, otherwise a significant negative effect may be witnessed in terms of jobs, investment, and even suppliers being forced to declare bankruptcy.
“The only thing that can make a difference is if the government of India sees it fit to support the industry for 6-8 months, then you can perhaps see a big change,” Goenka said.
Asked if a fiscal stimulus was required from the government at this stage, he replied in the affirmative.
“In the previous slowdowns, both times the government had given a fiscal stimulus and both times they have worked very well,” Goenka said .
Automobile sales in India witnessed its sharpest decline in nearly 19 years in July, dropping 18.71 per cent, rendering almost 15,000 workers jobless over the past two-three months as the sector reels under a prolonged slump, auto industry body SIAM reported earlier this month.
"If you look at our capex we have 15-20 per cent capex that has been deferred from our overall investment," Goenka said.

HC sets aside ED's order attaching Rs 8.22-bn deposits of Tech Mahindra

The Hyderabad High Court Monday set aside an Enforcement Directorate order provisionally attaching Rs 8.22 billion worth of fixed deposits belonging to Satyam Computer Services Ltd, which was acquired by Tech Mahindra.
In 2012, the Enforcement Directorate (ED) had issued provisional attachment orders freezing fixed deposits of Satyam (now merged into Tech Mahindra) in connection with its probe in the money laundering case.

The agency provisionally attached the amount alleging that it was ill-gotten proceeds of Satyam Computers.
A bench of Justices V Ramasubramanian and J Uma Devi Monday set aside the ED's orders.
Vivek Reddy, counsel for Tech Mahindra, told PTI they argued that there was no money when the Tech Mahindra took over the fraud-hit Satyam Computer Services Ltd (SCCL) in 2009 and on the other hand, the Mahindra group company had to infuse money to revive the B Ramalinga Raju-founded company.
"Our argument was that there was no proceeds of money when Tech Mahindra (TechM) took over the company (SCSL). There was no money in the company then and they (TechM) had to infuse money into the company.
"So where is the question of any ill-gotten money when the company had negative balance?" he said.
P V P Suresh Kumar, representing the ED, said the agency might approach the Supreme Court challenging the high court's order.
"One of the strongest grounds (for an appeal in the apex court) was that the CBI special court had earlier convicted Ramalinga Raju and brothers.
"In view of that conviction, it clearly shows that there was a contravention of the Money Laundering Act and IPC provisions. In such a situation, the attachment order passed by the Enforcement Directorate was valid and correct, according to the contravention," Kumar said.
"The ED will approach the Supreme Court after going through the order copy," he said.
Earlier, a single bench judge had stayed all further proceedings pursuant to the ED's attachment order.
Challenging the single judge order, the investigating agency had filed a writ appeal before a division bench.
The bench had on December 31, 2014 issued orders dismissing the ED's appeal, saying the act of the agency was contrary to rules.
Tech Mahindra argued that it was a victim of fraud and no proceedings could go under the provisions of the PMLA against "victims of fraud".
The ED had attached the accounts of SCCL as its probe claimed to have found that B Ramalinga Raju and his associates "wrongfully" offloaded inflated shares of the company by way of sale or pledging of shares.
A trail of loans derived from front companies revealed that Rs 8.22 billion out of Rs 21.71 billionfound their way to Satyam Computers and were used for day-to-day expenses like payment of salaries among others, the ED had said in its order.

Tech Mahindra Q2 profit jumps 27.3% at Rs 10.64 billion, tops estimates

Software services exporter Tech Mahindra Ltd posted a better-than-expected 27.3 per cent rise in second-quarter net profit on Tuesday, as it clocked more deals in the July-September period.
Net profit was Rs 10.64 billion ($144.51 million) in the three months ended September 30, compared with Rs 8.36 billion a year earlier, the Pune-based company said.

24 analysts on average had expected a quarterly profit of Rs 10.04 billion, according to Refinitiv data.
Revenue from operations increased 13.5 per cent to 86.30 billion rupees.