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Five high-profile exits that shook the Indian business fraternity

In his farewell note on Facebook after leaving Flipkart post the Walmart deal, Sachin Bansal co-founder and former CEO and executive chairman of Flipkart, had written, “Sadly my work here is done and after 10 years, it’s time to hand over the baton and move on from Flipkart. But I’ll be watching and cheering from the outside — Flipsters, you better continue to do a good job!”

While Bansal’s exit from the company was earlier attributed to the co-founder wanting to take time out post the Walmart deal, with Bansal taking home $1-1.5 billion, reports now emerge that he parted with the e-commerce startup on a bitter note.  According to a report from the Economic Times, Bansal was disappointed by the fact that he had been sidelined after deeply involved in the Flipkart-Walmart deal.

The past few years have seen a number of such high-profile partings, some of which have been highly publicised and nasty. We take a look at five such top executive level exits in the Indian business scene:

Aditya Ghosh: Amongst the latest high profile exits has been that of Aditya Ghosh, the President of the low-cost carrier, IndiGo Airlines. A law graduate from Delhi University, Ghosh began his journey with IndiGo Airlines, when he was working with law firm J Sagar Associates and IndiGo was one of his clients.  Impressed by his work, co-founder of the Airline, Rahul Bhatia, hired him on board. Ghosh was promoted as the CEO in 2007 and went on to work for the company for a decade – a period which saw the airline growing by leaps and bounds to become India’s largest carrier, consistently posting profits.

However, in the last six months, the Airlines has been taking a beating –  after a video of a staffer manhandling a man went viral in November last year, the Airline had to issue an apology. The airline took a further beating after it had to ground 11 A320neos after around 69 instances of engine failures had been reported by September 2017, a fact that it had been ignoring.

The airline also had a much public spat with Spicejet, its competitor, over issues such as who had a better on-time performance and a courtroom battle over shifting operations to Terminal 2 of the Delhi International Airport.

With accusations of mismanagement hanging over his head, Ghosh had to call it quits and resign from the company that he had nurtured for ten years. In the interim, Rahul Bhatia has appointed himself as the CEO until Gregory Taylor, who was with the airline previously, takes over.

Cyrus Mistry: From taking over the mantle of chairman of one of the largest conglomerates in India -the Tata Sons – in 2012 to having a nasty public spat with Ratan Tata and the Tata Group, Cyrus Mistry’s journey has been quite a turbulent one.

Cyrus inherited a rather loss-making company, where, out of the over 50 companies under the Tata group umbrella, only two – TCS and Tata Motors JLR are doing well. Mistry tried to undo all the damage that had been done, and in the process got fired. Ever since his unceremonious exit in October 2016, Mistry and the Tata Group have been embroiled in legal battle.

Tata Sons have alleged that Mistry did not provide any substantial contribution to the company, while also citing ‘conflict of interest,’ ‘poor governance’ and a ‘tendency to concentrate control’ of the Tata group companies, as reasons for his ouster. In an interview with The Hindu, Tata had also claimed that Mistry accused him of wanting to come back and that nothing was further from the truth. Another bone of contention was the June 2016 acquisition of Welspun Energy’s renewable assets by Tata Power. Questions were raised over how much the boards of both Tata Power and Tata Sons knew and supported the decision taken by Mistry.

Mistry, on his part, has alleged that one of the reasons for the Group’s less than profitable performance has been its decision to acquire the UK-based Corus at a price of USD 12 billion, making it an immensely costly deal. According to Mistry, the decision was based on one person’s ego, indirectly blaming interim chairman Ratan Tata for it. Mistry had also claimed that Tata wanted to sell the profit-making TCS to IBM – something which would have been disastrous for Tata. Subsequently, the Mistry family filed a case at the National Company Law Tribunal (NCLT) challenging the ouster and alleging mismanagement and oppression of minority stakeholders. Along with his brother, Shapoor Mistry, Cyrus Mistry, owns 18.4 percent of Tata Sons’ equity. 

Vishal Sikka:  Coming close on the heels of the Tata-Mistry fiasco was the Infosys board fight. Vishal Sikka joined Infosys as its CEO and MD in June 2014, becoming the first non-founder CEO of the company. He quit three years later in August 2017. Along with Sikka, 10 other senior executives, those who Sikka had hired from SAP, his previous employer, also quit over a period of one and a half years.

The reasons behind Sikka’s resignation are aplenty. One of the biggest bones of contention between Sikka and a part of the founder-shareholders, led by NR Narayana Murthy was the former’s compensation. The IT company’s philosophy has been that of ‘compassionate capitalism’ which recommends that the ratio between the highest salary paid to the company’s executive and the median salary should be 50 to 60. However, after a 55 percent hike, Sikka’s salary crossed that ratio when it stood at USD 11 million for FY 2017. The increase, however, was in RSUs (restricted stock units) and stock options which are based on the company’s performance.

Former CFO Rajiv Bansal’s severance package of Rs 17.4 crores also became an issue, as did appointment of Punita Sinha, wife of Minister of State for Finance Jayant Sinha as an independent director, with the founder members questioning her qualification to take up the job.

By Jasveer10 – Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=49196792

Rahul Yadav: It was in 2012 that IIT dropout Rahul Yadav started Housing.com with 11 other classmates after they found it difficult to find accommodation in Mumbai. Housing.com became one of the hottest startups of 2012, with SoftBank as one of its investors. However, soon, the brash young man started making news for the wrong reasons – annoying investors, accusing venture capital firm Sequoia of unethical practices allegedly rooted in poaching and trolling influential people such as Vishal Sikka of Infosys. Further, the startup had also been receiving flak for spending huge amounts on advertising, even though the business was not able to scale up.

Yadav also sent a scathing resignation letter, calling his board and investors ‘intellectually incapable’. Things reached a peak when, at a TownHall held by the company in Mumbai in May 2015, Yadav announced that he was giving away his personal shares that he owned of the company (4.5 percent) worth around Rs 150-200 crores, to the employees. This would have amounted to a whole year’s annual salary worth of company stocks. Yadav then challenged the CEOs of Zomato and Ola to match up with his gesture. The CEOs, however, did not take it lightly and Zomato CEO Deepinder Goyal sarcastically replied, ‘Auww so cute.’

Yadav was fired from Housing.com in June 2015, and the company board cited his “behaviour towards investors, ecosystem and the media” as the reason. Yadav is currently the CTO of ANAROCK Property Consultants, real estate stalwart Anuj Puri’s venture.

Mukesh Bansal: Mukesh Bansal the founder of fashion e-commerce brand Myntra came on board Flipkart after it acquired Myntra in May 2014. He was in charge of Flipkart’s e-commerce and advertising business. At that point of time, Flipkart was locked in a battle of dominance with Snapdeal and Amazon. However, after two years, Bansal called it quits in March 2016. While the parting was on a good note, with both Mukesh Bansal and Binny Bansal, Flipkart Group CEO, heaping praises at each other, the development came weeks after a management restructuring at the company that saw Binny Bansal taking over as the CEO. At one point, Mukesh Bansal had been in contention for the post of CEO. A fitness freak, Bansal has since co-founded health and fitness startup, CureFit.