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L&T Appoints Venkataramanan As CEO & MD

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In a long-awaited succession story of India Inc, corporate giant Larsen and Toubro on Friday appointed K Venkataramanan as its new CEO and Managing Director, while its current chief A M Naik would remain Executive Chairman for the next five years.

Venkataramanan, currently a whole-time director and its hydrocarbon business President, would assume his new role from April 1, L&T said, while bifurcating the roles of Chairman and Managing Director at the nearly 75-year-old engineering giant.

Anil Manibhai Naik, who turns 70 in June 2012, had joined L&T as a Junior Engineer in 1965 and rapidly rose to senior positions one after another, culminating in his current position of Chairman and MD in December 2003.

Krishnamurthi Venkataramanan, aged 67, has been with the nearly USD 12-billion group since 1969, when he joined it as a Graduate Engineer Trainee. He became a board member in 1995.

The company said that its board requested Naik to remain Executive Chairman for the next five years, given the need for a continuity in the wake of various business restructuring and organisational changes taking place at the group and the ongoing developments in the global and Indian economy.

Naik's present term was scheduled to end later this year and the industry was keenly waiting for the succession story at L&T, a major player in engineering, manufacturing, construction and a host of other new businesses, including technology and financial services.

In the new structure, Venkataramanan would be responsible for the day-to-day businesses of L&T, while Naik would focus on completing the portfolio restructuring, institutionalising Independent Company structure, mentoring and developing the leadership team and future leaders.

As part of the succession plan, L&T has also elevated Shailendra Roy, currently a Senior Vice President, to its board, the company said.

It is the first time in over eight years that L&T has bifurcated the roles of Chairman and MD.

Later in the day, Naik told reporters he will remain Executive Chairman till 2017 and had no intention to continue beyond that.

"Venkatramanan will look at parent and core businesses, where some restructuring is on and I will help him... I will be looking at other subsidiaries. That will take 70 per cent of my time," he noted.

Naik said that the entire succession plan took more than one year and he himself did not participate in the exercise.

He said that the group was now searching for global CEOs and it was looking at young-generation leaders, given the changing nature of businesses. "The new CEOs will come in 2015," Naik added.

"I am looking at the next team for a time span of 7-10 years," he said, and added that Venkataramanan was the most competent person to hold the position of CEO and MD.

L&T is one of the largest corporate groups in the country and its revenue grew by 19 per cent to over Rs 52,000 crore in last financial year, 2010-11. The post-tax profit of the group also grew by 12 per cent to over Rs 4,200 crore last fiscal.

L&T was founded in 1938 by two Danish engineers, Henning Holck-Larsen and Soren Kristian Toubro, here to provide engineering services to the Indian industry.

It became a public company in December 1950 and its total sales that year stood at about Rs 1.09 crore. The group currently has an employee strength of about 38,000 people.

Under Naik's leadership, the group has seen its revenue grow over seven-times from nearly Rs 7,400 crore in 1999, when he became CEO and MD of L&T. He later assumed the role of Chairman as well in 2003 - a position held by co-founder Henning Holck-Larsen till that time.