Sanjay Kapoors's departure from Micromax far from amicable
09 October 2015
Sanjay Kapoor's exit from mobile handset maker Micromax was far from amicable; rather he was pushed out of the chairman's post amid allegations by the company that he misappropriated fuel bills and counter-allegations by him that it had cooked up a malicious story to deny him his stock options.
Kapoor, a telecom sector veteran, resigned from Micromax two weeks after he was given a termination notice by Micromax co-founder and managing director Rahul Sharma stating that he misappropriated fuel bills.
Kapoor says the charges are baseless and he would send a legal notice to the company for denying him the employee stock options the firm owed during his 15 months with India's largest home-grown phone maker.
Kapoor's resignation letter to the Micromax directors on 27 July, filed with the Registrar of Companies (RoC), reveals a battle between him and the company, in which he says the timing of the termination notice was to "somehow deprive me of the ESOPS illegally". On the other hand, Sharma's termination notice dated 18 July makes the allegation of inflated fuel bills by Kapoor.
"I am entitled to ESOPs and other benefits. The valuation of the company has immensely increased due to my efforts. I have successfully got the commitment of huge investment in the company the fruits which the company has already started to reap," wrote Kapoor in his resignation letter.
He further said Micromax had an arrangement with a fuel station and all bills were presented by it to the company directly, and no question, therefore, arose of him presenting and getting payments cleared.
"By no stretch of the imagination it can be stated that I have misappropriated any amounts as no amounts were paid to me for fuel expenses. There were no cash transactions involved," he said.
Instead, he has claimed the sole motive for the 10 July letter was to "illegally" deprive him of his stock options.
But Micromax has a different take. "Sanjay Kapoor has decided to move on. Appropriate announcements will be made in due course. We would like to thank him for his contribution and wish him luck for his future endeavour", the company said in a statement on 28 August.
Micromax has been engaged in talks with Alibaba for over a year for the Chinese firm to invest $1 billion in the Indian handset maker, but the investment has not materialised so far. The 25 per cent stake sale to Alibaba, had it happened, would have valued Micromax at $3.5 billion.
On 7 August, Micromax revoked the stock options granted to Kapoor.
"The most unfortunate part of this pre-determined exercise is that the board has blindly and without any application of mind decided to terminate the services of its chairman when this particular item was not even on the agenda," wrote Kapoor, calling the board as unethical.