As part of its drive to increase professionalism in the group and with a view to improving its corporate governance drive, the Rs 3,900 crore Murugappa Group has introduced key management changes.

Mr. MV Subbaiah the current chairman of the group and a member of the family has stepped down from the position of chairman. In his place the group has appointed Mr. NS Raghavan, former managing director of India’s leading IT consulting company, Infosys Technologies, and a director on the Murugappa board since 1999, as the new new chairman.

Announcing this to the press Mr Subbiah said, " The board’s decision is a part of improving the corporate governance process of the Murugappa Group, initiated in October 1999 for transforming a family-owned business to a professionally managed one." Mr Subbiah will be the executive director in-charge of the group’s external relations function and lead its initiatives in business innovation. He will continue to play an active mentoring role for the Group’s sugar, neemazal, plantations and nutraceuticals business.

Mr NS Raghavan was inducted into the Murugappa Corporate Board or MCB in October 1999, as a part of group’s overall process of inducting professionalism into the work process. At around the same time two other professionals, Mr. Marti Subrahmanyam, professor at the Stern School of Business at the New York University and Mr Natalino Duo, managing director DCM Benetton India Ltd., were also inducted into the board. Mr Raghavan, so far an independent director of the MCB, will serve the group as a non-executive chairman, with specific mandate to search for a highly qualified successor to head the group. The new chairman will also be responsible for actualising the group’s vision and strengthening its corporate governance activities.

Reacting to his appointment Mr Raghavan said, "My focus will be to create the right cultural environment to encourage creativity and fuel growth. The Murugappa Group is blessed with a large talent pool, whose skills and expertise need to be leveraged for the benefit of the whole group."

The process of imparting professionalism into the group has already met with some success. Since inception of the program some 18 months ago, the MCB has fuelled growth through strategic acquisitions and helped sustain performance in difficult market situations through product and business innovations. The removal of cross holdings and exiting from low value businesses has helped the group to enhance shareholder value, said company spokesperson.

The Murugappa group, headquartered in Chennai, is a diversified conglomerate with business interests in engineering, abrasives, fertilisers and farm inputs, sugar, confectionery, financial services, plantations, sanitaryware, bio-products and marketing services. Murugappa group’s major companies include among others EID Parry, Tube Investments of India, Carborandum Universal, Coromandel Fertilisers, Cholamandalam Finance, Parry Agro and Parry Confectionery. The group turnover is expected to cross Rs 3,900 crore in fiscal 2001.