Shareholding in GMR Holdings, the apex decision-making body for the GMR group, including flagship publicly-held GMR Infra, has been divided equally among four key trusts -- one each owned by Group Chairman G M Rao, his two sons and son-in-law.
The changed structure, executed through an off-market transfer after Sebi approval, means the four trusts get indirect control of 17.57 per cent each in GMR Infra, in which GMR Holdings has a 70.3 per cent stake.
The move to bring shared ownership has come within weeks of the apex body revamping its management structure by making Kiran Grandhi, Rao’s younger son, the corporate chairman.
Now, Grandhi will be MD of GMR Infra and will lead key functions of group strategy and finance.
Industry analysts tracking family businesses said many corporate houses in India had been experimenting with several permutations and combinations to institutionalise their organisation.
GMR, they said, had been one of the few that were structuring their groups for the future in a very professional manner.
The GMR group has put in place an extensive family constitution, which clearly spells out various aspects, including the crucial succession plan, in which it has been aided by Rao’s long-time associate Prasad M Kumar, who is on the board of GMR Holdings as business chairman (institution building & governance) and has over 40 years of experience of working at diverse organisations in senior leadership and consulting positions.
In this role, he is responsible for providing strategic direction to institution building, corporate governance, sustainability, family office, emerging business, human resources, etc.
“This move to share GMR Holdings among the four trusts is certainly not part of a succession plan. It’s more of executing the family constitution of taking forward the agreed policies of co-ownership and partnership,” a senior GMR Group official noted.
GMR Group spokesperson said the process followed the agreed policies in the GMR family constitution.
“The GMR family believes in good corporate governance, which can be achieved through family governance systems in family-owned businesses.
“The GMR family constitution is a sophisticated document, crafted participatively over several years, involving all senior family members.
“It lays down various governance policies aimed at institutional perpetuity of the family business.
“This process emphasises the spirit of partnership and is not intended to accentuate rights and stakes,” the spokesperson added.
He further clarified the shares transferred to the four trusts were those of the holding company, GMR Holding, which was a private limited firm, so its shares were not freely transferable in terms of the articles of association and according to the provisions of the Companies Act.
Image: GMR Group chairman and MD GM Rao; Photograph: Courtesy, GMR Group