While an overwhelming 97% of investors in Cairn India Ltd passed a resolution to transfer control of the company to non-resident Indian Anil Agarwal's Vedanta from UK-based Bill Gammell on September 14, its senior management seems to be giving the $9.6 billion (Rs44,000 crore) transaction a thumbs-down.
On September 7, when Vijay Mehra put in his papers as chief information officer, he was the fifth in India's 22nd most valued company's (market capitalisation: Rs55,000 crore) top management to have left in less than three months.Less than two weeks before, chief financial officer (CFO) Indrajit Banerjee left the company on August 23 to join Ranbaxy as its president and CFO. August also saw the exit of director (health safety, security and emergency) — a position as important as the CEO's in this business — Colin Macintyre.
A month earlier, the company saw two top-level exits. Director (human resources) Senthil Kumar, left to join Tata Steel as its chief human resources officer.
Chief operating officer Rick Bott also marked his exit, though his last day at work will be December 31.
All told, two-fifths of the company's 12-member top management team has left, while one has joined — Sanjay Singh who replaces Kumar.
Questions now surround the continuation of the man at the top — managing director and chief executive officer Rahul Dhir - who declined to comment on this story.
Along with these exits, much of the ‘management premium' that Agarwal paid for Cairn has walked away. "I wouldn't underplay the role of the top management in the premium that has been paid for our company," said a senior serving executive.
"Key employees need to continue if there is to be no risk to (Cairn's) future prospects from management change," an August 16, 2010 report by Bank of America Merrill Lynch had said.
"There is a definite premium on people in this business," said an executive who has left the company. "But, even though much of the top management premium has been destroyed, the real value drivers in this business are the geo-technical people down the line."
Cultural issues dominate the exits. While Cairn India is a professionally-managed company today, the coming of Agarwal, insiders say, will change the texture of the company to a promoter-driven one.
"Yes, the change in ownership is definitely one of the reasons for my leaving the company," said an executive who has left Cairn India.
Emailed questions to Agarwal and Dhir got cryptic replies.
"Cairn India has a fantastic management team led by Rahul Dhir," a Vedanta spokesperson replied. "An overwhelming majority of the senior management team continue to lead Cairn India. We are proud of the fact that management teams of companies that have joined the Vedanta family, many years back, like Sesa Goa, Hindustan Zinc and others, continue to lead their companies to greater success."
A Cairn India spokesperson said, "As a growing organisation we have had some employees who have left us just as some new employees have joined us. Overall, our attrition levels remain well within the industry benchmarks."
Employees are uncertain. "We think differently, we behave differently, we function differently," a senior executive considering an exit said. "There is absolutely no way our styles can coexist."