Birla-Tata links cut off

The last link between Birla’s and Tata’s is now broken with Aditya Birla group Chairman Kumar Mangalam Birla resigning from the board of Tata Steel. Birla had tendered his resignation as a director of Tata Steel from August 14, five months after Pilani Investment and Industries reportedly offloaded over half its holding in Tata Steel and brought it down to around 40 lakh shares.

The Tata and the Birla group had recently had a major disagreement over the ownership of Idea cellular. The issue regarding the control of India's third largest telecommunication services provider using GSM technology was resolved with the Tatas selling off their stake to the Birlas.

Birla resigned from the board of Maruti Udyog three weeks ago. Sources in the Aditya Birla group say that this decision was taken to ensure that he dedicates more time to the various committees and institutions he was involved with.

Birla is a member of the Prime Minister’s Advisory Council, the Uttar Pradesh government’s investment task force, and committees of the Reserve Bank of India, and Confederation of Indian Industries in addition to being the chairman of eight listed companies.

He is also on the board of Indian Institute of Management (Ahmedabad) and Pilani Institute of Technologies.

Birla has been on the board of Tata Steel since 2001. He did not attend the last two annual general meetings and had remained absent on six of the seven board meetings of Tata steel in 2005-06.

Though industry observers feel that Birla’s shareholding in Tata steel may eventually be divested, Birla group says it will remain unaltered. Basant Kumar Birla, the chairman of the B K Birla group, and Kumar Mangalam’s grandfather said “There has been no change in our shareholding, and we have no intention to sell.”